UK Income Tax Rates and Bands for 2026/27

Income tax bands for 2026/27 (England, Wales and Northern Ireland)

The table assumes the standard personal allowance and tax code 1257L. Bands apply to taxable income from employment, self-employment, pensions and property. Savings interest and dividends have their own allowances and rates.

2025/26 rates for comparison

The 2025/26 tax year (6 April 2025 to 5 April 2026) used identical figures: a £12,570 personal allowance, 20% basic rate on the next £37,700, 40% higher rate up to £125,140 and 45% above. If you are checking a P60 or a P800 letter for last year, the same arithmetic applies.

Because the thresholds have not risen with inflation since 2021/22, pay rises are pulling more people into the higher-rate band. This is sometimes called fiscal drag: your tax bill rises faster than your pay even though the rates themselves have not changed.

How much tax do you pay in the UK? Worked examples

Income tax is progressive: each rate applies only to the slice of income inside its band. Moving into the higher-rate band does not make all your income taxed at 40%. Employees also pay National Insurance (8% between £12,570 and £50,270, then 2%), shown here so you can see real take-home pay.

Example at £35,000: £35,000 minus £12,570 leaves £22,430 taxed at 20%, which is £4,486 of income tax. National Insurance is £1,794.40, so take-home pay is £28,719.60 a year, or about £2,393 a month.

Example at £60,000: the first £37,700 of taxable income costs £7,540 at 20%; the remaining £9,730 is taxed at 40%, adding £3,892. Total income tax is £11,432 and NI is £3,210.60, leaving £45,357.40.

The 60% tax trap between £100,000 and £125,140

Once your adjusted net income goes over £100,000, your personal allowance is reduced by £1 for every £2 above that level. By £125,140 it has gone completely. Each extra £100 you earn in this range costs £40 in higher-rate tax plus a further £20, because £50 of allowance is withdrawn and now taxed at 40%. That is an effective income tax rate of 60%, or 62% once 2% National Insurance is added.

Example at £110,000: your allowance falls by £5,000 to £7,570, so taxable income is £102,430. Tax is £7,540 on the basic band plus £25,892 at 40%, a total of £33,432. That is £6,000 more than at £100,000 on an extra £10,000 of pay.

The trap is based on adjusted net income, not salary. Pension contributions and Gift Aid reduce it, which is why many people in this band pay extra into a pension. Our adjusted net income guide explains the options.

• £100,000 to £125,140: effective 60% income tax plus 2% NI.
• Above £125,140: no personal allowance at all, 45% additional rate.
• Losing Tax-Free Childcare and funded childcare hours above £100,000 can make the real cost even higher for parents.

What income tax applies to

Income tax is charged on wages, bonuses, most benefits in kind, self-employed profits, rental profits, most pensions (including the State Pension) and some taxable benefits. Employees pay through PAYE, so the employer deducts it each payday using your tax code. The self-employed and people with untaxed income pay through Self Assessment.

Savings interest is first covered by the personal savings allowance (£1,000 for basic-rate taxpayers, £500 for higher-rate, nil for additional-rate). Dividends have a £500 allowance, then are taxed at 8.75%, 33.75% or 39.35% in 2025/26. From April 2026 the ordinary and upper dividend rates rose by 2 percentage points to 10.75% and 35.75%, as announced at the Autumn Budget 2025.

How to work out your own income tax in four steps

You can check any income tax bill with four steps: total your taxable income, take off your personal allowance, apply the rates to what is left band by band, then compare the answer with the tax already deducted on your payslips or P60.

Step 1: add together salary, bonuses, taxable benefits such as a company car, self-employed profit, rental profit and taxable pension income. Leave out ISA income and anything sacrificed through salary sacrifice. Step 2: subtract the £12,570 allowance, reduced by £1 for every £2 of adjusted net income above £100,000. Step 3: tax the first £37,700 of what remains at 20%, the next slice up to £125,140 at 40%, and anything above at 45%. Step 4: compare with the tax already paid. A gap usually means a wrong tax code or untaxed income that needs a Self Assessment return.

Example: a £45,000 salary plus £3,000 of rental profit gives £48,000 of income. After the allowance, £35,430 is taxable, all within the basic-rate band, so the tax is £7,086.00. PAYE will already have taken tax on the salary, so the extra £600 on the rent is normally collected through Self Assessment or a tax code adjustment. Rental profit is taxed at the normal rates in 2026/27, but Budget 2025 confirmed separate property income rates of 22%, 42% and 47% from 6 April 2027.

Effective rate vs marginal rate at five salaries

Your effective rate is total income tax divided by gross pay. Your marginal rate is what you pay on the next £1 you earn, including employee National Insurance. The gap between the two is why people overestimate what a higher-rate tax bill means for them.

At £70,000 the marginal rate is 42%, but income tax takes only 22.0% of the whole salary. Inside the taper band the marginal rate jumps to 62%, the highest combined income tax and NI rate on salary in England, Wales and Northern Ireland.

Gift Aid and pension contributions stretch the basic-rate band

Gift Aid donations and relief-at-source pension contributions push the point where 40% tax starts higher, by the gross amount of the payment. That is how higher-rate taxpayers get their extra relief.

If you give a charity £800 under Gift Aid, the charity claims £200 from HMRC, making a £1,000 gross gift. A higher-rate taxpayer can then claim back a further £200 (the difference between 40% and 20% on £1,000) through Self Assessment, or by asking HMRC to adjust their tax code. GOV.UK also lets you treat donations made in the current tax year as if paid in the previous year, provided you claim on a return sent by the normal deadline. That is useful if you were a higher-rate taxpayer last year but will not be this year.

Relief-at-source pension contributions work the same way. Pay £4,000, and the provider adds £1,000. The basic-rate band then grows by £5,000, so £5,000 less of your income is taxed at 40%.

Mistakes people make when reading the tax bands

• Treating £50,270 as the band limit on gross pay in every case. HMRC's bands sit on taxable income (£37,700 at 20%). The £50,270 figure only holds with the full £12,570 allowance.
• Forgetting that benefits in kind count. A company car or private medical insurance is added to your income and can push you over a threshold even though your cash salary stays below it.
• Assuming a higher tax code is better. A code that is too generous just means an underpayment later, usually collected through next year's code.
• Applying these rates to savings and dividends. Savings use their own allowance and starting rate. Dividends have their own rates and a £500 allowance.
• Using these rates in Scotland. If your main home is in Scotland, six Scottish bands apply to earnings and pensions.