UK Income Tax Calculator Guide 2025/26: Rates, Bands & Thresholds

UK income tax for the 2025/26 tax year (6 April 2025 - 5 April 2026) ranges from 0% to 45% (48% in Scotland), with thresholds frozen until 2031. On a £45,000 salary in England, you'll pay £6,486 income tax (14.4% effective rate). The same salary in Scotland pays £6,912 - £426 more due to updated Scottish bands from April 2025.

Critical update: The personal allowance freeze has been extended to 2031 (previously 2028), meaning fiscal drag will pull millions more into higher tax brackets. Scottish starter and basic rate bands increased by 3.5% in April 2025, creating a new break-even point at ~£28,900. Above this, England becomes cheaper; below this, Scotland is cheaper.

This comprehensive guide explains exactly how UK income tax works, with verified 2025/26 rates, real calculation examples, and crucial differences between England, Wales, Northern Ireland, and Scotland.

UK Income Tax Rates 2025/26: England, Wales, Northern Ireland

Tax Bands and Rates

Tax 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%	No limit

Key threshold: Personal allowance withdraws at £1 per £2 earned over £100,000, creating a 60% marginal rate between £100,000-£125,140.

Personal Allowance Freeze Until 2031

Critical fiscal drag impact:

• Frozen at £12,570 since 2021/22
• Autumn Budget 2025 extended freeze to 2031 (was 2028)
• With 3.6% inflation (October 2025), real value eroding 3-4% annually
• Millions pulled into higher tax brackets as wages rise with inflation

Example of fiscal drag:

• 2021/22: £40,000 salary = £5,486 tax
• 2025/26: £40,000 salary = £5,486 tax (same)
• But £40,000 in 2021 = £44,766 in 2025 (inflation-adjusted)
• Real tax burden increased even if your actual tax amount hasn't changed

Calculate Your Exact Income Tax →

Scottish Income Tax 2025/26: Updated Bands

Scotland has a 7-band system with higher rates on middle and high earners. April 2025 update: Starter and basic bands increased by 3.5%.

Scottish Tax Bands 2025/26

Tax 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%	No limit

Changes from 2024/25:

• Starter band upper limit: £14,876 → £15,397 (+£521, +3.5%)
• Basic band upper limit: £26,561 → £27,491 (+£930, +3.5%)
• Other bands unchanged

Personal allowance withdrawal: Creates 67.5% marginal rate in Scotland (£100k-£125k) vs 60% in England.

England vs Scotland Tax Comparison 2025/26

Break-even point: ~£28,900

• Below £28,900: Scotland cheaper
• Above £28,900: England cheaper
• Gap widens significantly at higher incomes

Example differences:

Salary	England Tax	Scotland Tax	Difference	Winner
£20,000	£1,486	£1,429	Scotland saves £57	🏴󠁧󠁢󠁳󠁣󠁴󠁿 Scotland
£28,000	£3,086	£3,028	Scotland saves £58	🏴󠁧󠁢󠁳󠁣󠁴󠁿 Scotland
£35,000	£4,486	£4,912	England saves £426	🏴󠁧󠁢󠁥󠁮󠁧󠁿 England
£45,000	£6,486	£6,912	England saves £426	🏴󠁧󠁢󠁥󠁮󠁧󠁿 England
£60,000	£12,486	£13,602	England saves £1,116	🏴󠁧󠁢󠁥󠁮󠁧󠁿 England
£100,000	£32,486	£35,952	England saves £3,466	🏴󠁧󠁢󠁥󠁮󠁧󠁿 England

Key insight: Scottish lower earners benefit slightly, but middle and high earners pay significantly more. At £100k, Scotland costs £3,466/year more (10.7% higher tax).

Compare England vs Scotland Tax →

How to Calculate UK Income Tax: Step-by-Step

Example 1: £45,000 Salary in England

Step 1: Apply personal allowance

• Gross salary: £45,000
• Less personal allowance: -£12,570
• Taxable income: £32,430

Step 2: Calculate tax by band

• Basic rate (£12,571-£50,270): £32,430 × 20% = £6,486
• Higher rate: £0 (not reached)
• Additional rate: £0 (not reached)

Step 3: Total income tax

• Total: £6,486
• Effective rate: 14.4% (£6,486 ÷ £45,000)
• Take-home after tax only: £38,514

Example 2: £45,000 Salary in Scotland (Updated Bands)

Step 1: Apply personal allowance

• Gross salary: £45,000
• Less personal allowance: -£12,570
• Taxable income: £32,430

Step 2: Calculate tax by band

• Starter (£12,571-£15,397): £2,826 × 19% = £537
• Basic (£15,398-£27,491): £12,093 × 20% = £2,419
• Intermediate (£27,492-£43,662): £16,168 × 21% = £3,395
• Higher (£43,663-£45,000): £1,337 × 42% = £561
• Total: £6,912

Step 3: Effective rate and take-home

• Total tax: £6,912
• Effective rate: 15.4% (£6,912 ÷ £45,000)
• Take-home after tax only: £38,088
• Difference vs England: £426 more tax

Example 3: £70,000 Salary in England

Step 1: Apply personal allowance

• Gross salary: £70,000
• Personal allowance: £12,570 (no withdrawal under £100k)
• Taxable income: £57,430

Step 2: Calculate tax by band

• Basic rate (£12,571-£50,270): £37,699 × 20% = £7,540
• Higher rate (£50,271-£70,000): £19,729 × 40% = £7,892
• Total: £15,432

Step 3: Effective rate and take-home

• Total tax: £15,432
• Effective rate: 22.0%
• Take-home after tax only: £54,568

Calculate Any Salary Amount →

The 60% Tax Trap: £100,000 - £125,140

The personal allowance withdraws at £1 per £2 earned over £100,000, creating the UK's highest marginal tax rate.

How Personal Allowance Withdrawal Works

Standard personal allowance: £12,570

Formula:

• Personal allowance = £12,570 - (max(0, (income - £100,000) ÷ 2))
• Personal allowance hits £0 at £125,140 income

Example calculations:

Gross Income	Personal Allowance	Calculation
£100,000	£12,570	Full allowance
£105,000	£10,070	£12,570 - (£5,000 ÷ 2)
£110,000	£7,570	£12,570 - (£10,000 ÷ 2)
£115,000	£5,070	£12,570 - (£15,000 ÷ 2)
£120,000	£2,570	£12,570 - (£20,000 ÷ 2)
£125,140+	£0	No personal allowance

The 60% Marginal Rate Explained

Between £100,000 and £125,140:

• You pay 40% tax on income (higher rate)
• You lose £1 of personal allowance per £2 earned
• Lost personal allowance is taxed at 40%
• Effective marginal rate: 40% + (50% × 40%) = 60%

England example: £100,000 vs £110,000

£100,000 salary:

• Income tax: £32,486
• Take-home: £67,514

£110,000 salary (£10,000 more):

• Income tax: £38,486
• Take-home: £71,514
• Extra take-home: £4,000 (from £10,000 gross)
• Effective rate on extra £10k: 60%

Scotland: 67.5% marginal rate (48% top rate + withdrawal effect)

Strategies to Avoid the 60% Trap

1. Pension contributions (most effective)

• Salary sacrifice or personal contributions reduce taxable income
• Earn £110,000? Contribute £10,000 to pension
• Taxable income: £100,000 (back below threshold)
• Tax saving: £6,000 (60% of £10k) + £2,000 pension tax relief
• Total benefit: £8,000 from £10k contribution (effective 20% free money!)

2. Gift Aid donations

• Charitable donations extend basic rate band
• £10,000 donation extends £100k threshold to £110k
• Receive 20% tax relief, charity gets 25% Gift Aid bonus

3. Childcare vouchers or salary sacrifice

• Reduce gross income through pre-tax benefits
• Electric car salary sacrifice, cycle to work schemes
• Brings income below £100k threshold

4. Delay bonuses or income

• If close to threshold, defer bonus to next tax year
• Spread income across tax years to avoid trap

Calculate Impact of Pension Contributions →

Real Salary Examples: Complete Tax Breakdown

£25,000 Salary (England)

Income tax calculation:

• Taxable income: £25,000 - £12,570 = £12,430
• Basic rate: £12,430 × 20% = £2,486

Summary:

• Gross: £25,000
• Income tax: £2,486 (9.9% effective)
• Take-home (tax only): £22,514

£35,000 Salary (England)

Income tax calculation:

• Taxable income: £35,000 - £12,570 = £22,430
• Basic rate: £22,430 × 20% = £4,486

Summary:

• Gross: £35,000
• Income tax: £4,486 (12.8% effective)
• Take-home (tax only): £30,514

£50,000 Salary (England)

Income tax calculation:

• Taxable income: £50,000 - £12,570 = £37,430
• Basic rate: £37,430 × 20% = £7,486
• Higher rate: £0

Summary:

• Gross: £50,000
• Income tax: £7,486 (15.0% effective)
• Take-home (tax only): £42,514
• Note: Just £271 below higher rate threshold!

£60,000 Salary (England)

Income tax calculation:

• Taxable income: £47,430
• Basic rate: £37,699 × 20% = £7,540
• Higher rate: £9,729 × 40% = £3,892
• Total: £11,432

Summary:

• Gross: £60,000
• Income tax: £11,432 (19.1% effective)
• Take-home (tax only): £48,568

£100,000 Salary (England)

Income tax calculation:

• Taxable income: £87,430
• Basic rate: £37,699 × 20% = £7,540
• Higher rate: £49,729 × 40% = £19,892
• Additional rate: £0
• Total: £27,432
• Plus loss of personal allowance: £5,054 more
• Grand total: £32,486

Summary:

• Gross: £100,000
• Income tax: £32,486 (32.5% effective)
• Take-home (tax only): £67,514
• Marginal rate: 60% for next £25,140

£150,000 Salary (England)

Income tax calculation:

• No personal allowance (lost completely)
• Taxable income: £150,000
• Basic rate: £37,699 × 20% = £7,540
• Higher rate: £74,869 × 40% = £29,948
• Additional rate: £24,860 × 45% = £11,187
• Total: £48,675

Summary:

• Gross: £150,000
• Income tax: £48,675 (32.5% effective)
• Take-home (tax only): £101,325
• Marginal rate: 45% for all income above £125,140

Calculate Your Own Salary →

Tax Codes Explained 2025/26

Your tax code tells employers how much personal allowance to apply.

Common Tax Codes

1257L (Most common - standard personal allowance)

• 1257 = £12,570 personal allowance (remove final digit)
• L = entitled to standard personal allowance
• Used by most employees with one job

BR (Basic Rate - 20% on all income)

• Used for second jobs
• No personal allowance applied
• All income taxed at 20%

D0 (Higher Rate - 40% on all income)

• Second job for higher rate taxpayers
• No personal allowance
• All income taxed at 40%

K Code (Negative personal allowance)

• You owe more tax than personal allowance covers
• Example: K500 means you owe £5,000 additional tax
• Often due to company benefits, second job, or tax underpayments

0T (No personal allowance - emergency code)

• No personal allowance applied
• Tax calculated on cumulative basis
• Often temporary until HMRC updates records

Emergency Tax Codes

If you start a new job without P45:

• Week 1/Month 1 basis codes: Calculate tax only on current period
• Example: 1257L W1 or 1257L M1
• May overpay tax temporarily
• Contact HMRC to correct and claim refund

Understand Your Tax Code →

Dividend Tax and Additional Income 2025/26

If you have dividend income from shares or investments:

Dividend Allowance 2025/26

Tax-free dividend allowance: £500 (down from £1,000 in 2023/24)

Dividend Tax Rates

• Basic rate taxpayers: 8.75% on dividends above £500
• Higher rate taxpayers: 33.75% on dividends above £500
• Additional rate taxpayers: 39.35% on dividends above £500

Example: £45,000 salary + £3,000 dividends

Income tax (as calculated earlier): £6,486

Dividend tax:

• First £500: Tax-free
• Remaining £2,500: Within basic rate band
• £2,500 × 8.75% = £219

Total tax: £6,486 + £219 = £6,705

Savings Interest (Personal Savings Allowance)

Tax-free savings interest:

• Basic rate taxpayers: £1,000
• Higher rate taxpayers: £500
• Additional rate taxpayers: £0

Interest above allowance taxed at your marginal rate (20%, 40%, or 45%).

Calculate Total Tax on All Income →

Frequently Asked Questions

What are the UK income tax rates for 2025/26?

England, Wales, Northern Ireland: 0% (personal allowance £0-£12,570), 20% basic (£12,571-£50,270), 40% higher (£50,271-£125,140), 45% additional (£125,140+). Scotland has 7 bands: 0%, 19%, 20%, 21%, 42%, 45%, 48%. Personal allowance frozen until 2031. Updated Scottish bands from April 2025: starter to £15,397, basic to £27,491.

How much tax do I pay on £45,000?

England/Wales/NI: £6,486 income tax (14.4% effective rate). Scotland: £6,912 income tax (15.4% effective rate) - £426 more. This is tax only, excluding National Insurance. With NI (8% + 2%), total deductions rise to ~£10,000+ depending on exact circumstances. Use our calculator for complete breakdown including NI.

What is the 60% tax trap?

Between £100,000-£125,140, you lose £1 of personal allowance per £2 earned, while paying 40% higher rate tax. This creates an effective 60% marginal rate (67.5% in Scotland). Earn £110,000? You'll only take home £4,000 from the extra £10,000 over £100k. Avoid by making pension contributions to reduce taxable income below £100k.

When do the tax thresholds increase?

Tax thresholds are frozen until 2031 (extended from 2028 in Autumn Budget 2025). Personal allowance stays at £12,570, higher rate at £50,270. Exception: Scottish starter and basic bands increased by 3.5% in April 2025. Freezing creates "fiscal drag" - inflation pushes more people into higher tax bands.

Do I pay more tax in Scotland?

It depends. Break-even is ~£28,900. Below this, Scotland is slightly cheaper (£20k salary: save £57/year). Above this, England is cheaper. At £45k: pay £426 more in Scotland. At £60k: pay £1,116 more. At £100k: pay £3,466 more. Scottish bands updated April 2025 improved position slightly for earners under £28k.

What is my tax code for 2025/26?

Most employees have code 1257L (standard £12,570 personal allowance). Second jobs: BR (20% on all income). Higher rate second jobs: D0 (40% on all income). K codes mean you owe additional tax. 0T means no personal allowance. Emergency codes include W1 or M1 suffix. Check your payslip or contact HMRC if unsure.

How do I calculate take-home pay?

Deduct income tax and National Insurance from gross salary. Example £45,000: Income tax £6,486 + NI £3,474 = £9,960 deductions. Take-home: £35,040 (77.9%). Our calculator provides instant calculations including both taxes, student loans, pension contributions, and shows monthly/weekly breakdowns.

What happens if I earn over £100,000?

You enter the 60% tax trap. Personal allowance reduces by £1 per £2 earned over £100k, disappearing completely at £125,140. This creates 60% marginal rate (67.5% Scotland). Strategy: Make pension contributions to reduce taxable income below £100k. £10k pension contribution saves £6k tax (60%) plus gets £2k tax relief = £8k total benefit.

Are tax rates changing in 2026?

No confirmed changes for 2026/27 tax year yet. Current policy: thresholds frozen until 2031. Speculation of potential changes in Spring 2026 Budget, but nothing official. Scottish Parliament may adjust Scottish bands in February 2026 budget (historically announces in December/January for April implementation).

How much tax on £60,000 salary?

England/Wales/NI: £11,432 income tax (19.1% effective rate). Scotland: £12,548 (20.9% effective) - £1,116 more. You're in the higher rate band (income over £50,270 taxed at 40% in England, 42% in Scotland). Add ~£5,400 NI for total deductions of ~£16,800+. Take-home approximately £43,200-£44,000 depending on NI specifics.

Related Resources

• UK Tax Calculator - Calculate exact income tax and NI for any salary
• National Insurance Guide 2026 - Complete NI rates and thresholds
• Student Loan Repayment Calculator - Add student loan deductions to tax
• Take-Home Pay Calculator - See exact monthly take-home pay

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Official Sources:

• HMRC: Income Tax Rates 2025/26
• GOV.UK: Tax When You Get a Pension
• Scottish Government: Scottish Income Tax 2025/26 (April 2025 band updates)
• HMRC: Personal Allowance Withdrawal

Last updated: 10 December 2025 Disclaimer: Tax calculations based on 2025/26 rates effective 6 April 2025 - 5 April 2026. England/Wales/NI: Personal allowance £12,570, basic rate 20% (£12,571-£50,270), higher rate 40% (£50,271-£125,140), additional rate 45% (£125,140+). Scotland (updated April 2025): 7 bands with starter to £15,397 (19%), basic to £27,491 (20%), intermediate 21%, higher 42%, advanced 45%, top 48%. Personal allowance withdrawal creates 60% marginal rate (67.5% Scotland) £100k-£125,140. Thresholds frozen until 2031. This guide covers income tax only - add National Insurance for complete deductions. Tax treatment depends on individual circumstances. UK Calculator is not a tax adviser - consult HMRC or qualified accountant for complex situations.