Income Tax is the biggest deduction from most UK pay packets, and it is also the one that causes the most confusion. Being a higher-rate taxpayer does not mean your whole salary is taxed at the higher rate, Scotland has six bands where England has three, and a quirk just above £100,000 creates a rate that is higher than anything on the official tables.
This guide explains how the bands work for the 2026/27 tax year (6 April 2026 to 5 April 2027), using the rates published by HMRC. The UK Income Tax calculator shows the band-by-band split for your own income.
The short version
- Everyone with income under the income limit gets a tax-free Personal Allowance of £12,570.
- In England, Wales and Northern Ireland the rates are 20%, 40% and 45%.
- Scotland has six rates, from 19% to 48%.
- Above £100,000 your Personal Allowance is withdrawn, which makes that slice of income the most heavily taxed.
- In England, Wales and Northern Ireland the band limits are the same as in 2025/26.HMRC
£7,486
- Per month
- £624
- Personal Allowance
- £12,570
- Taxable income
- £37,430
- Effective rate
- 15%
- Top rate you pay
- 20%
- Income after Income Tax
- £42,514
- This covers Income Tax only. National Insurance is separate: see the take-home pay or National Insurance calculators.
Income Tax: £7,486 for 2026/27 on £50,000 (England & Northern Ireland)
Show the breakdown
| Line | Year | Month |
|---|---|---|
| Income | £50,000 | £4,167 |
| Personal Allowance (tax-free) | £12,570 | £1,048 |
| Taxable income | £37,430 | £3,119 |
| Basic rate 20% on £37,430 | £7,486 | £624 |
| Income Tax | £7,486 | £624 |
| Income after Income Tax | £42,514 | £3,543 |
- Tax-free and after-tax income£42,51485%
- Basic rate tax£7,48615%
The Personal Allowance
The Personal Allowance is the amount of income you can have each year before any Income Tax is due. For 2026/27 it is £12,570, the same across the whole UK, including Scotland.
It covers most kinds of income: wages, pensions, self-employed profits, rental profits, and savings and dividends if you have allowance left over. If you have two jobs, your allowance normally goes against the main one and the second job is taxed from the first pound, usually on a BR code.GOV.UK
The allowance is given through your tax code. The standard code, 1257L, simply means “this person gets the standard allowance”. A different code usually means HMRC is adjusting your allowance for something, such as a company car or an underpayment from last year.GOV.UK
Bands in England, Wales and Northern Ireland
HMRC sets the bands on taxable income, meaning income after your Personal Allowance has been taken off. That is why the official table can look different from the salary figures people quote.
| Band | Taxable income | Rate |
|---|---|---|
| Basic rate | Up to £37,700 | 20% |
| Higher rate | Over £37,700 up to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
To turn this into a salary, add the Personal Allowance to the basic rate band. With the standard allowance, the higher rate starts on income above £50,270, which is deliberately the same point where employee National Insurance drops to its lower rate. By the time income reaches the additional rate threshold, the Personal Allowance has been withdrawn completely (see the £100,000 trap below), so the additional rate starts at £125,140 of total income.
Wales has its own Welsh rates of Income Tax, set by the Senedd, and your tax code starts with C. For 2026/27 the Welsh rates are the same as England’s, so a Welsh taxpayer pays exactly the same.GOV.UK Northern Ireland uses the England rates.
How the bands actually work
Each band only applies to the slice of income that falls inside it. A pay rise that crosses into the higher rate is taxed at the higher rate only on the part above the line. Nobody ever takes home less because a pay rise moved them into a new band.
You can see this in the effective rate, which is your total Income Tax divided by your total income:
| Income (England) | Income Tax | Effective rate | Top rate paid |
|---|---|---|---|
| £20,000 | £1,486 | 7.4% | 20% |
| £30,000 | £3,486 | 11.6% | 20% |
| £45,000 | £6,486 | 14.4% | 20% |
| £60,000 | £11,432 | 19.1% | 40% |
| £100,000 | £27,432 | 27.4% | 40% |
| £150,000 | £53,703 | 35.8% | 45% |
Even at £60,000, where the top slice is taxed at the higher rate, the effective rate is well under it. The “top rate paid” column matters for decisions at the margin, such as how much a pay rise or a pension contribution is worth to you.
| Line | Year | Month |
|---|---|---|
| Income | £60,000 | £5,000 |
| Personal Allowance (tax-free) | £12,570 | £1,048 |
| Taxable income | £47,430 | £3,953 |
| Basic rate 20% on £37,700 | £7,540 | £628 |
| Higher rate 40% on £9,730 | £3,892 | £324 |
| Income Tax | £11,432 | £953 |
| Income after Income Tax | £48,568 | £4,047 |
Scotland’s six bands
If your main home is in Scotland, you pay Scottish Income Tax on your earnings, pension and self-employed profits, and your tax code starts with S. It doesn’t matter where your employer is based. The Scottish Parliament sets the bands and rates; HMRC collects the tax.GOV.UK
Like the UK bands, these are set on taxable income after the Personal Allowance:
| Scottish band | Taxable income over | Rate |
|---|---|---|
| Starter | £0 | 19% |
| Basic | £3,967 | 20% |
| Intermediate | £16,956 | 21% |
| Higher | £31,092 | 42% |
| Advanced | £62,430 | 45% |
| Top | £125,140 | 48% |
To find the salary where each band starts, add your Personal Allowance to the “taxable income over” figure. The starter and basic bands were widened for 2026/27, so lower earners in Scotland pay slightly less than last year.
Scotland vs England at different incomes
The starter rate means Scottish taxpayers on modest incomes pay a little less than in England. Higher up, the intermediate rate and the earlier start of the higher rate mean they pay more.
| Income | England, Wales, NI | Scotland |
|---|---|---|
| £20,000 | £1,486 | £1,446 |
| £30,000 | £3,486 | £3,451 |
| £45,000 | £6,486 | £6,882 |
| £60,000 | £11,432 | £13,182 |
| £100,000 | £27,432 | £30,732 |
| £150,000 | £53,703 | £59,634 |
At £45,000 a Scottish taxpayer is already paying the Scottish higher rate of 42% on the top slice, while someone in England on the same income is still a basic-rate taxpayer. National Insurance is the same everywhere, so these differences carry straight through to take-home pay. The salary after tax guide shows monthly take-home side by side.
The £100,000 taper trap
Once your adjusted net income goes over £100,000, your Personal Allowance is reduced by 50% of the income above the limit, until it reaches nothing.GOV.UK Adjusted net income is broadly your total taxable income (including dividends and savings) minus things like gross pension contributions and Gift Aid donations.
The effect is that each extra pound in this range is taxed at the higher rate, and also removes half a pound of allowance, which is then taxed at the higher rate too. Watch the allowance shrink and the tax climb:
| Income (England) | Personal Allowance | Income Tax |
|---|---|---|
| £100,000 | £12,570 | £27,432 |
| £110,000 | £7,570 | £33,432 |
| £120,000 | £2,570 | £39,432 |
| £130,000 | £0 | £44,703 |
Compare the first two rows: an extra £10,000 of income adds far more tax than the higher rate alone would suggest. In Scotland the same taper applies, with the Scottish rates on top. Add employee National Insurance at 2% and very little of a pay rise in this range reaches your bank.
How to get the allowance back
Because the test uses adjusted net income, pension contributions bring it down. On £110,000, a relief-at-source pension contribution of £10,000 (gross, including the basic-rate relief your provider claims) cuts the Income Tax bill from £33,432 to £29,432, and the full allowance of £12,570 comes back.GOV.UK Salary sacrifice works too, because it lowers your salary in the first place. Gift Aid donations reduce adjusted net income in the same way.
Higher-rate relief on relief-at-source contributions is not automatic. You claim it through Self Assessment or by contacting HMRC.
Income that uses different rates
Not all income goes through the same bands.
- Dividends have their own rates: 10.75%, 35.75% and 39.35%, after a £500 dividend allowance. The basic and higher dividend rates went up from April 2026.GOV.UK
- Savings interest has its own allowances on top of the Personal Allowance.
- Scottish taxpayers pay UK rates, not Scottish rates, on dividends and savings interest.
Dividends sit on top of your other income, so a salary uses up the bands first. Company directors who pay themselves mostly in dividends should read salary vs dividends, and the dividend tax calculator works out both together.
How tax is collected
For employees and pensioners, Income Tax is taken through PAYE. Your employer uses your tax code to spread your allowance and bands across the year, and because PAYE is cumulative, it corrects itself if your pay changes from month to month. The take-home pay calculator shows the result with National Insurance, student loans and pension added.
If you are self-employed, or have untaxed income above certain limits, you pay through Self Assessment instead, using the same bands. The self-employed tax guide explains how that works, including Class 4 National Insurance. For an overview of everything on a payslip, see the UK take-home pay guide.
Figures on this page are calculated from 2026/27 rates published by HMRC and GOV.UK. They are estimates for a full tax year, not tax advice.
