UK Income Tax Calculator 2026/27

How UK Income Tax works

Income Tax in the United Kingdom is charged on your taxable income — your total earnings from employment, self-employment, pensions, property and certain savings, minus your Personal Allowance. For 2025/26 the standard Personal Allowance is £12,570, so you pay no Income Tax at all on the first £12,570 you earn.

Most people never have to calculate any of this themselves because tax is collected through PAYE (Pay As You Earn). Your employer or pension provider uses your tax code to deduct the right amount of Income Tax and National Insurance from each payslip before you are paid. If you are self-employed, a landlord, a company director, or have significant untaxed income, you instead report and pay through Self Assessment, filing an annual return to HMRC. It is perfectly possible to be in both systems at once — for example a salaried employee with a side business.

Income Tax is separate from National Insurance and from Student Loan repayments, which have their own thresholds and rates. This calculator focuses on Income Tax; use the salary calculator if you want to see National Insurance and take-home pay as well.

Step-by-step: how your tax is calculated

Income Tax is worked out in slices, with each slice taxed at its own rate. Here is the order HMRC applies for England, Wales and Northern Ireland in 2025/26:

1. Total your taxable income for the year — salary, profits, pensions, rental income and so on.
2. Deduct your Personal Allowance of £12,570 (reduced if your income is over £100,000). The result is the income you actually pay tax on.
3. Tax the first £37,700 of that taxable income at the Basic Rate of 20%.
4. Tax the next slice, up to total income of £125,140, at the Higher Rate of 40%.
5. Tax anything above £125,140 at the Additional Rate of 45%.
6. Add up the tax from each band to get your total Income Tax bill for the year.

For example, on a £60,000 salary you pay nothing on the first £12,570, 20% on the next £37,700 (£7,540), and 40% on the remaining £9,730 (£3,892) — a total of £11,432 in Income Tax.

UK Income Tax bands and rates 2025/26

The rates and thresholds below apply to taxpayers in England, Wales and Northern Ireland. They are published by HMRC at gov.uk/income-tax-rates.

• Personal Allowance (0%) — the first £12,570 of income is tax-free.
• Basic Rate (20%) — taxable income up to £37,700, i.e. earnings of roughly £12,571 to £50,270.
• Higher Rate (40%) — income from £50,271 to £125,140.
• Additional Rate (45%) — income above £125,140.

The Personal Allowance taper bites once your adjusted net income passes £100,000. From that point your £12,570 allowance is cut by £1 for every £2 you earn, so it is fully withdrawn at £125,140. This is why the Higher Rate band effectively stretches to £125,140 rather than ending at the headline Additional Rate threshold.

These thresholds have been frozen for several years rather than rising with inflation, which gradually pulls more people into higher bands — an effect known as fiscal drag.

Scottish Income Tax rates 2025/26

If you live in Scotland you pay Scottish Income Tax on your earnings and pensions, set by the Scottish Parliament rather than Westminster. The Personal Allowance is the same £12,570, but there are six bands instead of three:

• Starter Rate (19%) — £12,571 to £14,876
• Basic Rate (20%) — £14,877 to £26,561
• Intermediate Rate (21%) — £26,562 to £43,662
• Higher Rate (42%) — £43,663 to £75,000
• Advanced Rate (45%) — £75,001 to £125,140
• Top Rate (48%) — above £125,140

Scottish taxpayers therefore reach the Higher (42%) rate at just £43,663 — well below the £50,270 point in the rest of the UK. Note that Scottish rates apply only to non-savings, non-dividend income such as your salary; savings and dividend income are taxed at the UK-wide rates wherever you live. National Insurance is also identical across the whole UK.

Effective rate, marginal rate, and the 60% trap

Two different percentages describe your tax, and it pays to know which is which. Your marginal rate is the tax on your next pound of income — 20%, 40% or 45% depending on your band. Your effective rate is your total tax divided by your total income, which is always lower because the early slices of your income are taxed at 0% and 20%.

For instance, a £60,000 earner is a 40% taxpayer at the margin but has an effective Income Tax rate of only about 19%. When deciding whether extra work, a bonus or a pay rise is worthwhile, the marginal rate is what matters; for budgeting, the effective rate is more useful.

The most punishing marginal rate is the 60% tax trap between £100,000 and £125,140. In this band every extra £2 of income costs you £1 of Personal Allowance, and that withdrawn allowance is taxed at 40% on top of the 40% already due — an effective marginal rate of 60% (and over 67% in Scotland). Making a pension contribution or Gift Aid donation to drop your adjusted net income back below £100,000 can be remarkably tax-efficient, reclaiming the lost allowance at the same time.

UK specifics: tax codes, deadlines, allowances and reliefs

Your tax code tells your employer how much tax-free pay to give you. The standard code is 1257L: multiply 1257 by 10 to get your £12,570 allowance, and the L confirms you receive the standard amount. Codes such as BR (all income at Basic Rate), D0 (all at Higher Rate), K codes (extra tax for untaxed income or benefits) and NT (no tax) signal a different situation. If your code looks wrong you can check it in your Personal Tax Account at gov.uk or contact HMRC.

If you file Self Assessment, the key date is 31 January following the end of the tax year. The return for 2024/25 — and payment of any tax owed — is due by 31 January 2026, with a £100 automatic penalty for filing late even if no tax is due. Paper returns are due earlier, by 31 October.

Finally, keep the difference between an allowance and a relief clear. An allowance is income you can receive tax-free — the Personal Allowance, the £1,000 Personal Savings Allowance, the £500 Dividend Allowance. A relief reduces the tax due on income you have earned, such as tax relief on pension contributions or Gift Aid, which can also extend your Basic Rate band and pull income out of the higher brackets. Both reduce your bill, but they work in different ways.

This guide is for general information only and reflects published 2025/26 figures; it is not personal tax advice. For your own circumstances, check gov.uk/income-tax-rates or speak to a qualified adviser.

Frequently asked questions