UK Income Tax 2026/27: Bands, Rates, and How Much You'll Pay

How much of your salary actually reaches your bank account? Most people can name their gross salary instantly but have a much fuzzier idea of what they actually take home once Income Tax and National Insurance are deducted. If you're employed, this happens automatically through PAYE (Pay As You Earn) before you're ever paid. If you're self-employed or have other income, you report and pay it yourself through self-assessment.

This guide breaks down exactly how UK Income Tax works for the 2026/27 tax year: the bands, the rates, Scotland's separate system, and the lesser-known 60% trap that catches higher earners out. It sits in our Tax category, alongside our other HMRC-based calculators.

What is UK Income Tax?

Income Tax is charged by HMRC on most types of income: salary, self-employment profits, pensions, and some other sources. The UK tax year runs from 6 April to 5 April the following year, which is why you'll see it referred to as the 2026/27 tax year rather than a calendar year.

Everyone gets a Personal Allowance, currently £12,570, which is the amount you can earn tax-free before any Income Tax applies. Above that, tax is charged in bands, at increasing rates. It's worth knowing the difference between your marginal rate (the rate charged on your next pound of income) and your effective rate (your total tax bill as a percentage of your whole income), since these are often very different numbers. Use our Income Tax calculator to see both for your own salary.

2026/27 Income Tax bands and rates

These are the standard bands for England, Wales and Northern Ireland. Scotland uses a different set, covered further down.

Worked example: £60,000 salary

Someone earning £60,000 pays nothing on the first £12,570. The next £37,700 (up to £50,270) is taxed at 20%, and the remaining £9,730 falls into the Higher Rate band at 40%.

That's an effective rate of about 19%, well below the 40% marginal rate, because most of the income is still taxed at lower bands.

The Personal Allowance taper for high earners

Once your income passes £100,000, your Personal Allowance starts shrinking: you lose £1 of allowance for every £2 you earn above that threshold. By £125,140, the allowance is gone completely.

This creates a well-known quirk. Take someone whose salary rises from £100,000 to £100,100, a £100 pay rise. They lose £50 of Personal Allowance, which becomes taxable at 40%, on top of paying 40% on the £100 itself. The result is £60 of extra tax on a £100 rise, an effective marginal rate of 60%, higher than the official 45% Additional Rate that only applies far above this level.

Scotland has different Income Tax bands

If you live in Scotland, your Income Tax is calculated using the Scottish Government's own bands, on top of the same £12,570 Personal Allowance used across the rest of the UK.

On the same £60,000 salary used above, a Scottish taxpayer pays around £13,214, roughly £1,782 more than the £11,432 paid by someone on the standard rest-of-UK bands. The gap grows wider the more you earn, since Scotland's Higher and Top rates both start sooner and run hotter than the equivalent English, Welsh and Northern Irish bands.

National Insurance: the other tax you pay

Income Tax isn't the only deduction from your pay. Employees also pay Class 1 National Insurance, at 8% on earnings between £12,570 and £50,270, and 2% on anything above that.

On a £60,000 salary, NI comes to around £3,211, taking total Income Tax and NI to roughly £14,643, before any pension contributions or student loan repayments. Our take-home pay calculator combines both, plus pension and student loan, into one clear monthly figure.

Common tax codes explained

Your tax code tells your employer how much tax-free pay to give you. The most common code, 1257L, reflects the standard £12,570 Personal Allowance. A few others worth knowing: BR taxes all your income at the Basic Rate, often used on a second job; D0 and D1 tax everything at the Higher or Additional Rate; and K codes mean you have negative allowance, often because you owe tax from a previous year or receive taxable benefits, so extra is added to your taxable income rather than subtracted.

You might also see W1 or M1 after your code, marking it as an emergency, non-cumulative code, common when starting a new job without a P45. If your code looks wrong, check your HMRC personal tax account or contact HMRC directly; getting it corrected quickly avoids either overpaying or building up an unexpected bill.

How to reduce your Income Tax legally

A handful of well-established options can lower your tax bill without any aggressive planning:

• Pension contributions reduce your taxable income directly, and are particularly valuable for reclaiming lost Personal Allowance in the £100,000 to £125,140 trap.
• Salary sacrifice works similarly, and also reduces the National Insurance both you and your employer pay.
• Gift Aid donations extend your Basic Rate band, meaning Higher and Additional Rate taxpayers can reclaim further relief through self-assessment.
• Marriage Allowance lets a non-taxpayer transfer 10% of their Personal Allowance to a Basic Rate-taxpayer spouse or civil partner, saving up to £252 a year.
• ISAs don't reduce Income Tax on your salary directly, but shelter savings interest and investment growth from further tax, which adds up over time.

Frequently asked questions