For 2026/27 you pay no income tax on the first £12,570 of your income (the Personal Allowance). In England, Wales and Northern Ireland the next £37,700 is taxed at 20%, income above that is taxed at 40%, and anything over £125,140 is taxed at 45%. Only the slice of pay that falls inside each band is taxed at that band’s rate.
How the Personal Allowance works
The Personal Allowance is the amount you can earn in a tax year (6 April 2026 to 5 April 2027) before income tax starts. It is £12,570 for most people. If your adjusted net income is over £100,000 it shrinks by £1 for every £2 above that figure, and it has disappeared completely by £125,140.
That shrinkage is why the effective tax rate between £100,000 and £125,140 is higher than the headline 40%. It is worth knowing about if a bonus or a pay rise is about to push you over £100,000. Pension contributions can reduce adjusted net income, which is covered in Net pay, salary sacrifice or relief at source: how pension contributions affect your pay.
Income tax bands in England, Wales and Northern Ireland
Tax is worked out on your taxable income, which is your income minus the Personal Allowance.
| Band | Taxable income | Rate |
|---|---|---|
| Basic rate | Up to £37,700 | 20% |
| Higher rate | £37,701 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
With a full allowance, the higher rate starts when your total income passes £50,270 (£12,570 plus £37,700).
Income tax bands in Scotland
Scotland sets its own rates and bands for earned income. These apply to taxable income after the allowance:
| Band | Taxable income | Rate |
|---|---|---|
| Starter | £0 to £3,967 | 19% |
| Basic | Up to £16,956 | 20% |
| Intermediate | Up to £31,092 | 21% |
| Higher | Up to £62,430 | 42% |
| Advanced | Up to £112,570 | 45% |
| Top | Above £112,570 | 48% |
For someone on £50,000, Scottish income tax is higher than the rest of the UK. Our calculator gives £8,982 in Scotland against £7,486 elsewhere. The Personal Allowance itself is the same across the UK.
Worked example: a £60,000 salary
Take a salary of £60,000 in England, with no pension and no student loan.
- Taxable income: £60,000 − £12,570 = £47,430.
- Basic rate: £37,700 × 20% = £7,540.
- Higher rate: the remaining £9,730 × 40% = £3,892.
- Total income tax: £11,432.
That is about 19% of the gross salary, well below the 40% top rate, because most of the pay sits in lower bands. National Insurance is charged separately; see National Insurance for employees: what you pay and why. Together tax and NI on £60,000 come to about 24% of pay in our calculator, leaving roughly £45,357 a year.
What the tax code means
Your employer normally collects income tax through PAYE using a tax code. The common code for 2026/27 is based on the £12,570 allowance, but codes change if you have taxable benefits, owe tax from a previous year, or have more than one job or pension. If a code looks wrong, check it on your payslip or in your HMRC online account, and ask HMRC if you are unsure. Our estimates assume a standard code.
Other income, such as savings interest above your allowances, dividends, rental profits or self-employed earnings, can be taxed differently and may need a Self Assessment return. Check GOV.UK for the rules that apply to you.
Note: This is general information, not tax advice. Rates and thresholds can change, so check GOV.UK or speak to a qualified adviser for your own circumstances.
Try the calculator
Enter your salary, region and any pension or student loan into the UK take-home pay to see income tax, National Insurance and take-home pay for 2026/27. For a step-by-step version, see How to work out your take-home pay from a UK salary. The figures are estimates.
Open the free UK take-home pay
Worked example 2: £110,000 and the shrinking Personal Allowance
Once income passes £100,000 the calculation changes, because the allowance falls by £1 for every £2 over that figure. Take £110,000 in England with no pension.
- Income over £100,000: £10,000, so the allowance is cut by £5,000 to £7,570.
- Taxable income: £110,000 − £7,570 = £102,430.
- Basic rate: £37,700 × 20% = £7,540.
- Higher rate: the remaining £64,730 × 40% = £25,892.
- Total income tax: £33,432.
That is about 30% of gross pay. Our take-home pay calculator gives the same income tax figure and shows National Insurance of £4,211 on top, leaving about £72,357 a year.
The lost allowance means you pay 40% on each extra pound and also lose 50p of allowance per extra pound, which is taxed at 40% too, or another 20p. So every extra £1 between £100,000 and £125,140 is effectively taxed at 60% (40% plus 20%). That is why pension contributions are often looked at by people in this range, as covered in Net pay, salary sacrifice or relief at source: how pension contributions affect your pay. It is also a good reason to check whether the figure used is your adjusted net income rather than your salary.
Tax at different salaries compared
All of these use the 2026/27 England, Wales and Northern Ireland bands with a standard allowance and no pension. The £50,000 and £60,000 figures match the earlier examples, while the others are calculated by hand from the band rules.
| Salary | Taxable income | Income tax | Share of salary |
|---|---|---|---|
| £30,000 | £17,430 | £3,486 | 11.6% |
| £50,000 | £37,430 | £7,486 | 15.0% |
| £60,000 | £47,430 | £11,432 | 19.1% |
| £110,000 | £102,430 | £33,432 | 30.4% |
The share of salary climbs gradually even though the headline rate jumps from 20% to 40%. This is the effect of tax bands: each rate applies only to the slice inside its band.
How to work out your own income tax step by step
- Start with your total taxable income for the year: pay, taxable benefits, and other taxable income.
- Work out your Personal Allowance. It is £12,570 unless your adjusted net income is over £100,000.
- Subtract the allowance to get taxable income. If the result is below zero, no tax is due.
- Apply the bands in order, filling the lowest band first.
- Add up the tax from each band.
- Divide by gross income to see your average rate.
Do not forget that some income is taxed separately. Dividends have their own rates, covered in Dividend tax explained: rates, allowance and a worked example, and self-employed profit follows different rules for payment, set out in Self-employed tax explained: income tax, National Insurance and payments on account.
Common mistakes with income tax
- Believing a pay rise can drop you into a “higher tax bracket” and cut take-home pay. Only the extra slice is taxed more.
- Applying the Scottish bands to someone who lives in England, or the reverse. Residence for tax is based on rules about where you live, so check GOV.UK if you move or split time between countries.
- Ignoring non-salary income such as rent, savings interest above the allowances, or side-business profits.
- Treating a tax code as final. Codes are estimates, and a mismatch can lead to over- or under-paying until it is fixed.
- Confusing income tax with National Insurance. They have different thresholds and rates.
Glossary of income tax terms
- Personal Allowance: the amount of income you can have each tax year before income tax applies.
- Taxable income: income after the allowance is taken off.
- Adjusted net income: total taxable income less certain deductions such as pension contributions paid before tax and Gift Aid, used for the £100,000 test.
- PAYE: Pay As You Earn, the system your employer uses to deduct tax from pay.
- Tax code: letters and numbers telling your employer how much allowance to give you.
- Marginal rate: the rate on your next pound of income.
- Effective or average rate: total tax divided by total income.
- Self Assessment: a yearly return used to report income that is not fully taxed through PAYE.
Ways people legitimately lower the tax they pay
Most reductions come from reliefs that Parliament has built in, not from clever schemes. Paying into a pension reduces taxable income, and the way it is done matters, as Net pay, salary sacrifice or relief at source: how pension contributions affect your pay sets out. Charitable donations made under Gift Aid can extend your basic-rate band, which matters if you pay higher-rate tax. Some people can also claim allowances for savings interest, dividends or trading and property income, and married couples or civil partners may be able to share part of their allowance in certain cases. Eligibility depends on your circumstances, so confirm each relief on GOV.UK before relying on it, and keep records in case HMRC asks.
Frequently asked questions
Do I pay 40% tax on all my income once I earn over £50,270?
No. Only the part of your income above the higher-rate threshold is taxed at 40%. Everything below it is still taxed at 0% or 20%.
Is the Personal Allowance the same in Scotland?
Yes, the £12,570 allowance applies across the UK. What differs in Scotland is the set of bands and rates applied to income above it.
Why is my tax more than the calculator shows?
You may have a different tax code, taxable benefits in kind, extra income or a previous underpayment. The calculator uses a standard code and salary only, so treat its result as an estimate.
When does the tax year start?
The UK tax year runs from 6 April to 5 April the following year, so 2026/27 runs from 6 April 2026 to 5 April 2027.
What is the marginal rate between £100,000 and £125,140?
It is effectively 60% in England, Wales and Northern Ireland, because you pay 40% tax and also lose £1 of Personal Allowance for each £2 earned. The allowance is gone entirely at £125,140.
How is Scottish tax calculated differently?
The same Personal Allowance applies, but taxable income is then split into Scotland’s six bands. At £50,000 our estimate is £8,982 in Scotland compared with £7,486 elsewhere.
Do I pay tax on my pension contributions?
Contributions are usually made with tax relief, but how that happens depends on the method used. See the guide on pension contributions for net pay, salary sacrifice and relief at source.
Is income tax paid monthly or yearly?
If you are employed, your employer normally deducts it each pay period through PAYE, using your tax code. Other income may be settled through Self Assessment.