Understanding UK income tax bands is essential for calculating your take-home pay, planning pension contributions, and making financial decisions. Here are the current rates.
Table of Contents
2026/27 UK Income Tax Bands (England, Wales, Northern Ireland)
Band
Taxable Income
Tax Rate
Personal Allowance
Up to £12,570
0%
Basic Rate
£12,571–£50,270
20%
Higher Rate
£50,271–£125,140
40%
Additional Rate
Over £125,140
45%
The Personal Allowance is reduced by £1 for every £2 of income above £100,000 — creating an effective 60% marginal rate between £100,000 and £125,140.
Scottish Income Tax Bands (2026/27)
Scotland sets its own income tax rates:
Band
Taxable Income
Tax Rate
Personal Allowance
Up to £12,570
0%
Starter Rate
£12,571–£14,876
19%
Basic Rate
£14,877–£26,561
20%
Intermediate Rate
£26,562–£43,662
21%
Higher Rate
£43,663–£75,000
42%
Advanced Rate
£75,001–£125,140
45%
Top Rate
Over £125,140
48%
Scottish residents pay more tax on income above £26,561 and less on income below that.
Income Tax Calculation Examples
England/Wales/NI: £40,000 Salary
Income Portion
Rate
Tax
First £12,570
0%
£0
£12,571–£40,000
20%
£5,486
Total
£5,486
Effective rate
13.7%
England/Wales/NI: £70,000 Salary
Income Portion
Rate
Tax
First £12,570
0%
£0
£12,571–£50,270
20%
£7,540
£50,271–£70,000
40%
£7,892
Total
£15,432
Effective rate
22.0%
England/Wales/NI: £120,000 Salary
Income Portion
Rate
Tax
First £12,570
0%
£0
£12,571–£50,270
20%
£7,540
£50,271–£100,000
40%
£19,892
£100,001–£120,000 (reduced PA)
40% + PA claw-back
£12,000*
Total
£39,432
Effective rate
32.9%
*The Personal Allowance reduction creates an effective 60% rate in this band.
The £100K Tax Trap
Between £100,000 and £125,140, you lose £1 of Personal Allowance for every £2 earned. This creates the UK’s highest effective marginal rate:
Income
Personal Allowance Lost
Effective Marginal Rate
£100,000
£0
40%
£105,000
£2,500
60%
£110,000
£5,000
60%
£115,000
£7,500
60%
£120,000
£10,000
60%
£125,140
£12,570 (all gone)
45%
Strategy: Pension contributions can bring your adjusted net income below £100,000, restoring your Personal Allowance and effectively giving you 60% tax relief on those contributions.
National Insurance Contributions (NICs)
In addition to income tax, employees pay National Insurance:
Employee NICs (Class 1)
Earnings
NIC Rate
Up to £12,570 (Primary Threshold)
0%
£12,571–£50,270 (Upper Earnings Limit)
8%
Over £50,270
2%
Employer NICs (Class 1)
Earnings
NIC Rate
Up to £9,100 (Secondary Threshold)
0%
Over £9,100
13.8%
Self-Employed NICs (Class 4)
Profits
NIC Rate
Up to £12,570
0%
£12,571–£50,270
6%
Over £50,270
2%
Combined Tax + NIC Rates
Your true marginal rate combines income tax and NICs:
Income Band
Income Tax
Employee NIC
Combined Rate
£0–£12,570
0%
0%
0%
£12,571–£50,270
20%
8%
28%
£50,271–£100,000
40%
2%
42%
£100,001–£125,140
60%*
2%
62%
Over £125,140
45%
2%
47%
*Effective rate due to Personal Allowance withdrawal.
Take-Home Pay Examples
Gross Salary
Income Tax
Employee NIC
Take-Home (Annual)
Take-Home (Monthly)
£25,000
£2,486
£994
£21,520
£1,793
£30,000
£3,486
£1,394
£25,120
£2,093
£40,000
£5,486
£2,194
£32,320
£2,693
£50,000
£7,486
£2,994
£39,520
£3,293
£60,000
£11,432
£3,194
£45,374
£3,781
£75,000
£17,432
£3,494
£54,074
£4,506
£100,000
£27,432
£3,994
£68,574
£5,714
£150,000
£52,932
£4,994
£92,074
£7,673
These exclude pension contributions, student loan repayments, and any benefits.
Tax-Free Allowances and Reliefs
Allowance
Amount
Detail
Personal Allowance
£12,570
Reduced above £100K
Marriage Allowance
£1,260 transfer
For couples where one earns under £12,570
Dividend Allowance
£500
Tax-free dividends
Personal Savings Allowance
£1,000 (basic) / £500 (higher)
Tax-free savings interest
Capital Gains Annual Exempt
£3,000
Tax-free capital gains
ISA Allowance
£20,000
Tax-free saving/investing
Key Takeaways
The Personal Allowance (£12,570) means no tax on the first chunk of income
Most people pay 28% combined (20% tax + 8% NIC) on income between £12,571 and £50,270
The £100K–£125K trap creates a 62% effective marginal rate — pension contributions are the best way to avoid it
Scottish taxpayers pay higher rates above £26,562 and a top rate of 48%
Effective tax rates are always lower than marginal rates — a £50,000 earner pays about 21% overall (tax + NIC combined)
