UK Income Tax Calculator 2025/26: Complete Guide

UK income tax for 2025/26 starts at 20% on income between £12,571 and £50,270 (the basic rate band). Someone earning £45,000 pays exactly £6,486 in income tax: take their £45,000 salary, deduct the £12,570 personal allowance, then apply 20% to the remaining £32,430.

However, higher earners face a devastating 60% marginal tax rate between £100,000 and £125,140 due to personal allowance withdrawal. Earn £110,000? You'll pay £27,928 income tax (effective rate 25.4%), but that extra £10,000 above £100k costs you £6,000 in tax - a 60% marginal rate that catches thousands of professionals off guard.

This guide explains how UK income tax works for 2025/26, provides step-by-step calculations for common salaries, compares England vs Scotland, and shows you exactly what you'll pay at every income level.

How to Calculate UK Income Tax (2025/26)

UK income tax uses a progressive band system. You don't pay your tax rate on your entire salary - you pay different rates on different portions of your income.

The process:

Start with gross annual salary
Deduct personal allowance (£12,570 for most people)
Apply tax rates to remaining income in bands
Sum up tax from all bands

Tax bands for England, Wales, and Northern Ireland (2025/26):

Personal Allowance: First £12,570 = 0% tax
Basic rate: £12,571 to £50,270 = 20% tax
Higher rate: £50,271 to £125,140 = 40% tax
Additional rate: £125,140+ = 45% tax

Let's work through four real examples to show exactly how this works.

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Example 1: £30,000 Salary (Basic Rate Taxpayer)

Step 1: Gross salary = £30,000 Step 2: Less personal allowance = £30,000 - £12,570 = £17,430 taxable Step 3: Apply tax rates:

£17,430 falls entirely within basic rate band
Tax = £17,430 × 20% = £3,486

Total income tax: £3,486 Take-home after income tax only: £26,514 Effective tax rate: 11.6%

Example 2: £45,000 Salary (Basic Rate Taxpayer)

Step 1: Gross salary = £45,000 Step 2: Less personal allowance = £45,000 - £12,570 = £32,430 taxable Step 3: Apply tax rates:

£32,430 falls entirely within basic rate band (limit is £50,270)
Tax = £32,430 × 20% = £6,486

Total income tax: £6,486 Take-home after income tax only: £38,514 Effective tax rate: 14.4%

Example 3: £60,000 Salary (Higher Rate Taxpayer)

Step 1: Gross salary = £60,000 Step 2: Less personal allowance = £60,000 - £12,570 = £47,430 taxable Step 3: Apply tax rates:

First £37,700 at basic rate (£12,571 to £50,270): £37,700 × 20% = £7,540
Remaining £9,730 at higher rate (£50,271 to £60,000): £9,730 × 40% = £3,892
Total tax = £7,540 + £3,892 = £11,432

Total income tax: £11,432 Take-home after income tax only: £48,568 Effective tax rate: 19.1%

Example 4: £100,000 Salary (Higher Rate, Before PA Withdrawal)

Step 1: Gross salary = £100,000 Step 2: Less personal allowance = £100,000 - £12,570 = £87,430 taxable Step 3: Apply tax rates:

First £37,700 at basic rate: £37,700 × 20% = £7,540
Remaining £49,730 at higher rate: £49,730 × 40% = £19,892
Total tax = £7,540 + £19,892 = £27,432

Total income tax: £27,432 Take-home after income tax only: £72,568 Effective tax rate: 27.4%

Important: At exactly £100,000, you keep your full personal allowance. Earn £100,001 and the 60% tax trap begins (explained below).

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UK Tax Bands 2025/26: Quick Reference

England, Wales, Northern Ireland

Band	Income Range	Rate	Tax on Band
Personal Allowance	£0 - £12,570	0%	£0
Basic rate	£12,571 - £50,270	20%	Up to £7,540
Higher rate	£50,271 - £125,140	40%	Up to £29,948
Additional rate	£125,140+	45%	45% of amount over £125,140

Total max tax at £125,140: £37,488 (no personal allowance at this level)

Key thresholds:

£12,570: Start paying income tax (basic rate begins)
£50,270: Enter higher rate bracket (40%)
£100,000: Personal allowance starts withdrawing (60% marginal rate begins)
£125,140: Personal allowance fully withdrawn, additional rate begins (45%)

Tax-free allowance: £12,570 (frozen until April 2031)

Scottish Income Tax: 7 Bands vs 3

Scotland has a more progressive tax system with 7 tax bands instead of 3. If you live in Scotland on 6 April (start of tax year), Scottish rates apply to your earned income (not savings/dividends).

Scottish Tax Bands 2025/26

Band	Income Range	Rate	Tax on Band
Personal Allowance	£0 - £12,570	0%	£0
Starter rate	£12,571 - £15,397	19%	Up to £537
Basic rate	£15,398 - £27,491	20%	Up to £2,419
Intermediate rate	£27,492 - £43,662	21%	Up to £3,396
Higher rate	£43,663 - £75,000	42%	Up to £13,162
Advanced rate	£75,001 - £125,140	45%	Up to £22,563
Top rate	£125,140+	48%	48% of amount over £125,140

Scotland vs England Comparison

At £50,000 salary:

England/Wales/NI: £7,486 income tax
Scotland: £9,014 income tax
Difference: Scotland pays £1,528 more (20.4% more tax)

At £30,000 salary:

England/Wales/NI: £3,486 income tax
Scotland: £3,487 income tax
Difference: Scotland pays £1 more (virtually identical)

At £75,000 salary:

England/Wales/NI: £17,432 income tax
Scotland: £19,514 income tax
Difference: Scotland pays £2,082 more (11.9% more tax)

Break-even point: Around £27,850. Below this, Scotland is slightly cheaper (by pennies). Above this, England/Wales/NI is cheaper, with the gap widening as income increases.

Highest earners (£150,000+): Scotland becomes cheaper again due to 48% top rate vs England's 45%, but personal allowance withdrawal still makes Scotland more expensive overall until very high incomes.

Compare Your Tax in Scotland vs England →

Understanding Personal Allowance

Your personal allowance is the amount you can earn tax-free each year. For 2025/26, it's £12,570 for most people.

How it works:

First £12,570 of income: 0% tax
Income above £12,570: Taxed at appropriate rate (20%, 40%, or 45%)

Personal allowance is frozen until April 2031 (extended from 2028). This means fiscal drag: as wages rise with inflation but allowance doesn't, more people are pulled into higher tax brackets.

When Personal Allowance Reduces

The £100,000 threshold:

If you earn over £100,000, your personal allowance reduces by £1 for every £2 you earn above £100,000.

Examples:

Income £105,000:

Over threshold by: £5,000
Personal allowance reduces by: £5,000 ÷ 2 = £2,500
New personal allowance: £12,570 - £2,500 = £10,070

Income £125,140 or more:

Over threshold by: £25,140+
Personal allowance reduces by: £25,140 ÷ 2 = £12,570
New personal allowance: £12,570 - £12,570 = £0
You have NO personal allowance!

Key point: At £125,140+, you pay tax on your entire income from £1, not just from £12,571.

The 60% Tax Trap (£100,000 - £125,140)

The personal allowance withdrawal creates a 60% marginal tax rate between £100,000 and £125,140 - higher than the 45% additional rate!

How the 60% rate is created:

You pay 40% higher rate tax on earnings between £100k-£125k
PLUS you lose £1 personal allowance for every £2 earned
That lost allowance is taxed at 40%
Effective marginal rate: 40% + (£1 allowance lost × 40% tax) = 60%

Real Example: Earning £110,000

Income: £110,000 Over £100k threshold by: £10,000

Personal allowance withdrawal:

Standard PA: £12,570
Reduction: £10,000 ÷ 2 = £5,000
Actual PA: £12,570 - £5,000 = £7,570

Tax calculation:

£7,570 at 0% (remaining PA) = £0
£37,700 at 20% (basic rate band) = £7,540
£64,730 at 40% (higher rate, including the £10k trap) = £25,892
Total tax: £33,432

Marginal rate on that £10,000 above £100k:

Extra £10,000 earned
Tax paid on it: £6,000
Marginal rate: 60%
You keep just £4,000 of the £10,000 earned!

Key insight: A £10,000 pay rise from £100k to £110k gives you only £4,000 extra take-home (after income tax). The other £6,000 goes to HMRC.

Avoiding the 60% Trap

Pension contributions:

Contribute £10,000 to pension
Reduces taxable income from £110,000 to £100,000
Escapes the trap entirely
Tax saving: £6,000 (vs paying 60% on that £10k)
Plus get pension tax relief, and employer might match

Salary sacrifice:

EV car salary sacrifice
Childcare vouchers (if grandfathered)
Cycle to Work scheme
All reduce taxable income

Charitable donations:

Gift Aid donations reduce taxable income
£10,000 donation: Saves you £6,000 in tax (60% relief!)
Charity claims back basic rate (20%) too

Calculate Your Tax and Plan Strategies →

Common Deductions That Reduce Taxable Income

These deductions happen before tax is calculated, reducing your taxable income:

Before Income Tax is Calculated

Pension contributions (relief at source or salary sacrifice):

Workplace pension contributions
Personal pension contributions
Reduces taxable income, saving tax at your marginal rate
Higher rate taxpayers save 40%, additional rate save 45%

Salary sacrifice schemes:

Pension contributions via salary sacrifice
Electric car leasing
Cycle to Work scheme
Reduces gross salary before tax

Trading/employment expenses:

Professional fees (union subscriptions, professional body fees)
Working from home allowance
Business mileage (if self-employed or claiming expenses)

After Income Tax (Not Deductions)

These are paid from your net income (already taxed):

Student loan repayments (deducted via PAYE but not tax-deductible)
National Insurance (separate from income tax)
Childcare costs (unless using salary sacrifice vouchers)

Important: Only pre-tax deductions reduce your income tax bill. Post-tax payments don't affect how much tax you pay.

Using Our Tax Calculator

Our UK tax calculator shows you exactly what you'll pay in income tax and National Insurance for 2025/26.

How to use it:

Enter your gross annual salary (before any deductions)
Select your location (England/Wales/NI or Scotland)
Add pension contributions (if you make them via salary sacrifice or relief at source)
Click calculate

What you'll see:

Total income tax for the year
National Insurance contributions
Take-home pay (after income tax and NI)
Effective tax rate
Marginal tax rate (on next £1 earned)
Monthly and weekly take-home pay

Advanced features:

Compare multiple scenarios (e.g., £50k vs £60k salary)
See Scotland vs England tax differences
Calculate impact of pension contributions
Understand 60% tax trap if earning £100k-£125k

Try Our Tax Calculator Now →

Frequently Asked Questions

How is income tax calculated in the UK?

Deduct your £12,570 personal allowance from your gross salary. Apply 20% tax to income between £12,571-£50,270 (basic rate), 40% to income between £50,271-£125,140 (higher rate), and 45% to income above £125,140 (additional rate). Sum the tax from all bands. Example: £45,000 salary = £6,486 tax (£45,000 - £12,570 = £32,430 × 20%).

What is my personal allowance for 2025/26?

£12,570 for most people (frozen until April 2031). If you earn over £100,000, it reduces by £1 for every £2 you earn above £100,000. At £125,140 income, your personal allowance is £0 - you pay tax on every pound earned.

Do I pay tax on the first £12,570?

No. The first £12,570 you earn is tax-free (your personal allowance). You only pay income tax on income above £12,570. Example: Earn £20,000, pay tax on just £7,430 (£20,000 - £12,570), which equals £1,486 in tax.

What is the 60% tax trap?

Between £100,000 and £125,140, you lose £1 of personal allowance for every £2 earned. This creates a 60% effective tax rate: 40% higher rate tax plus 40% tax on the lost allowance (40% + 20% effective = 60%). Earning £110,000 instead of £100,000 gives you only £4,000 extra take-home, not £10,000.

How much tax do I pay on £40,000?

£5,486. Calculation: £40,000 - £12,570 personal allowance = £27,430 taxable × 20% basic rate = £5,486. Plus National Insurance: ~£2,400 (Class 1 employee). Total deductions ~£7,886. Take-home: ~£32,114 (before student loans if applicable).

Are Scottish and English tax rates the same?

No. Scotland has 7 tax bands (19%, 20%, 21%, 42%, 45%, 48%) vs England's 3 (20%, 40%, 45%). On £50,000, Scotland pays £1,528 more tax than England. On £30,000, they're virtually identical. Break-even point is around £27,850 - below this Scotland is fractionally cheaper, above it England is cheaper.

Can I reduce my income tax?

Yes, through pension contributions (save tax at 20-45%), salary sacrifice schemes, charitable donations with Gift Aid, and claiming all allowable expenses (professional fees, working from home allowance). Higher rate taxpayers in the 60% trap (£100k-£125k) save 60% on pension contributions - the most tax-efficient strategy available.

When do I start paying income tax?

When your annual income exceeds £12,570 (your personal allowance). On your first pound above £12,570, you pay 20% basic rate tax. This applies regardless of age - even part-time workers pay tax once they earn over £12,570 annually.

What is my marginal vs effective tax rate?

Marginal rate is tax on your next £1 earned (20%, 40%, 45%, or 60% in the trap). Effective rate is total tax ÷ total income. Example: £60,000 earner pays £11,432 tax = 19.1% effective rate, but marginal rate is 40% (tax on next pound). Effective rate is always lower because personal allowance is tax-free.

How do I check my tax code is correct?

Your tax code should be 1257L for 2025/26 if you have standard personal allowance (£12,570). Check payslips or HMRC online account. Wrong code means overpaying or underpaying tax. Contact HMRC to correct it. Scottish taxpayers have 'S' prefix (S1257L).

Related Resources

National Insurance Guide 2025/26 - Understand NI contributions alongside income tax
UK Tax Bands 2025/26 - Complete breakdown of all tax rates
Take-Home Pay Calculator - See your net pay after all deductions
Student Loan Repayments - Calculate student loan deductions on top of tax

Official Sources:

HMRC: Income Tax Rates and Personal Allowances
GOV.UK: Tax on Your Income
Scottish Government: Scottish Income Tax 2025-26

Last updated: 9 January 2025 Disclaimer: Tax thresholds frozen until April 2031. Personal allowance £12,570, basic rate 20% (£12,571-£50,270), higher rate 40% (£50,271-£125,140), additional rate 45% (£125,140+). Scottish rates differ. Always verify tax code with HMRC. Personal allowance withdraws at £100,000+ creating 60% marginal rate. National Insurance is separate and additional to income tax. UK Calculator is not a tax adviser.