Income Tax rates for 2026/27
| England, Wales and Northern Ireland | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | over £125,140 | 45% |
| Scotland | Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter rate | £12,571 to £16,537 | 19% |
| Basic rate | £16,538 to £29,526 | 20% |
| Intermediate rate | £29,527 to £43,662 | 21% |
| Higher rate | £43,663 to £75,000 | 42% |
| Advanced rate | £75,001 to £125,140 | 45% |
| Top rate | over £125,140 | 48% |
The Personal Allowance and the rUK band thresholds are frozen until April 2031, so as pay rises more of it falls into higher bands. This is often called fiscal drag.
National Insurance
Employees pay Class 1 National Insurance of 8% on earnings between £12,570 and £50,270 a year and 2% above that. It is worked out on each pay period separately, so a large bonus in one month can be taxed a little differently from the yearly figure shown here. Your employer pays a further 15% on your earnings above £5,000, which does not come out of your pay but is part of what you cost them.
The 60% tax trap
Between £100,000 and £125,140 your Personal Allowance is withdrawn at £1 for every £2 of income. Each extra £1 of pay in that range costs 40p of higher-rate tax plus 20p from the lost allowance: an effective rate of 60%, or 62% with National Insurance, and more with a student loan. It also removes eligibility for tax-free childcare and 30 hours of free childcare above £100,000.
The usual fix is a bigger pension contribution. Salary sacrifice or extra personal contributions reduce adjusted net income, so money that would have been taxed at 60% goes into your pension instead. The rate chart above shows the spike, and the cards show what it would take for your salary.
Pension schemes and tax relief
- Relief at source: you pay from take-home pay, your provider adds 20% basic-rate relief. Higher and additional-rate taxpayers claim the rest through Self Assessment; the calculator includes it by widening your bands.
- Net pay: your employer takes the contribution before Income Tax, so you get full relief automatically. National Insurance is still charged.
- Salary sacrifice: you give up salary in exchange for an employer contribution, saving Income Tax and National Insurance. It can lower your contractual salary for mortgage applications.
Student loan repayments
| Plan | Threshold 2026/27 | Rate |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 (Scotland) | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate loan | £21,000 | 6% |
Repayments are a percentage of income above the threshold, not of the balance, so they act more like a tax. Plan 2 loans are written off 30 years after the April you were first due to repay.