UK Income Tax Calculator 2026/27

How UK income tax is worked out on a salary in 2026/27

Income tax on a salary is worked out in three steps: take off anything paid before tax (such as a net pay pension), take off your tax-free Personal Allowance, then tax what is left through the bands. The bands apply to taxable income, not to your whole salary, which is why someone earning £60,000 does not pay 40% on all of it.

For most people in England, Wales and Northern Ireland the first £12,570 is tax-free, the next £37,700 is taxed at 20%, and only income above £50,270 reaches the 40% higher rate. Take a £60,000 salary: £9,730 sits in the higher band and costs £3,892, while the basic-rate slice costs £7,540. Total income tax is £11,432, an average of 19.1% of gross pay.

The table shows what the same engine behind the calculator produces for common salaries with no pension or student loan, for a taxpayer outside Scotland.

What counts as taxable income, and what does not

Income tax is charged on earnings from employment, self-employed profits, most pensions (including the State Pension), some state benefits, rental income, taxable benefits from your job, trust income and savings interest above your allowance. This calculator handles the employment part. If you also have savings, rental profit or dividends, they are added on top of your salary and taxed at the rate band they fall into.

Several kinds of income are tax-free by law: interest and gains inside an ISA, Premium Bond and National Lottery prizes, the first £1,000 of trading income and the first £1,000 of property income, and dividends inside the £500 dividend allowance. Savings interest is covered by the Personal Savings Allowance of £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers, with no allowance at the additional rate.

• Benefits in kind such as a company car or private medical insurance do not appear in your cash pay but are taxed, usually by reducing the number in your tax code.
• Dividends and savings interest always use UK-wide rates, even for Scottish and Welsh taxpayers.
• Salary sacrificed into a pension is not taxable pay at all, because your contract salary falls.

Allowances and adjustments that change the answer

The standard Personal Allowance is not the only thing that moves your bill. Check whether any of these apply before relying on a headline figure.

• Marriage Allowance: a spouse or civil partner who earns less than the Personal Allowance can transfer £1,260 of it to a basic-rate partner, cutting the partner's tax by up to £252 a year.
• Blind Person's Allowance adds £3,250 of tax-free income in 2026/27. Tick it in the calculator if you are registered blind or severely sight impaired.
• Allowance taper: above £100,000 of adjusted net income, the allowance falls by £1 for every £2, so it is zero at £125,140. At £110,000 the calculator shows £33,432 of income tax because £5,000 of allowance has gone.
• Pension contributions under relief at source extend your basic-rate band and reduce adjusted net income, which can restore some of a tapered allowance.
• Welsh taxpayers: the Welsh Government sets the rates, which in 2026/27 match the rest of the UK, and HMRC adds a C to the start of the tax code.

How PAYE collects the tax through the year

Your employer does not wait until the end of the year. Under PAYE, each payslip gives you a share of your allowance and bands, normally one twelfth if you are paid monthly: £1,047.50 tax-free and £3,141.67 at the basic rate each month. Most codes are cumulative, so the payroll looks at your total pay and tax since 6 April and corrects small errors automatically on the next payslip.

That is why a month with overtime or a bonus can show more tax than usual, and why starting a job part-way through the year can produce a refund in your first pay packet. If the code is non-cumulative (ending M1, W1 or X), each payslip is treated in isolation and any over- or underpayment is left for HMRC to settle later.

After 5 April, HMRC compares what you paid with what you owed. If they do not match, it sends a P800 tax calculation; these letters go out between June and March of the following year. If you owe more than £3,000, HMRC asks for payment through Simple Assessment instead of adjusting your code.

Common mistakes when estimating income tax

These are the errors that most often make a hand calculation disagree with a payslip.

• Applying the 40% rate to all income once you pass £50,270. Only the slice above that line is taxed at 40%.
• Adding National Insurance to the income tax band rates. NI is a separate charge with its own thresholds (8% and 2% for employees), and it applies to each pay period on its own rather than to the year.
• Forgetting a student loan. Repayments are not tax, but they come off the same payslip and can take 9% of pay above your plan threshold.
• Using last year's figures. The 2026/27 tax year runs from 06 April 2026; check the year selector matches the payslip you are comparing against.
• Using gross salary when you pay into a net pay pension. Your taxable pay is lower than your contract salary, so tax is lower too.