UK Income Tax Calculator Guide 2025/26: Tax Bands Explained
Understanding UK income tax is essential for financial planning. This comprehensive guide explains the 2025/26 tax bands, personal allowance, National Insurance contributions, and how to calculate your take-home pay.
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UK Income Tax Bands 2025/26
Income tax in the UK is charged at different rates depending on your income level. For the 2025/26 tax year (6 April 2025 to 5 April 2026):
| Band | Taxable Income | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Personal Allowance
The personal allowance is the amount you can earn before paying any income tax:
Key Points
- Standard allowance: £12,570
- Reduction: Decreases by £1 for every £2 earned over £100,000
- Complete removal: At £125,140 income, personal allowance is zero
- Marriage Allowance: Transfer up to £1,260 to spouse if eligible
Personal Allowance Reduction Example
If you earn £110,000:
- Amount over £100,000 = £10,000
- Reduction = £10,000 ÷ 2 = £5,000
- Your personal allowance = £12,570 - £5,000 = £7,570
National Insurance Contributions (NIC)
Employed workers pay National Insurance in addition to income tax:
| Band | Earnings | NI Rate 2025/26 |
|---|---|---|
| Below threshold | Up to £12,570/year | 0% |
| Primary threshold | £12,570 to £50,270 | 8% |
| Upper earnings limit | Over £50,270 | 2% |
Note: NI thresholds aligned with income tax personal allowance from 2024.
How to Calculate Your Tax
Step 2: Apply tax rates to each band
Step 3: Add National Insurance
Step 4: Subtract from gross to get take-home pay
Example: £50,000 Salary
Income Tax:
- Personal Allowance (£12,570): £0 tax
- Basic Rate (£12,571-£50,000 = £37,430): £37,430 × 20% = £7,486
National Insurance:
- £12,570-£50,000 (£37,430): £37,430 × 8% = £2,994
Total Deductions: £7,486 + £2,994 = £10,480
Annual Take-Home: £50,000 - £10,480 = £39,520
Monthly Take-Home: £3,293
Take-Home Pay at Different Salaries
| Gross Salary | Income Tax | NI | Annual Take-Home | Monthly |
|---|---|---|---|---|
| £25,000 | £2,486 | £995 | £21,519 | £1,793 |
| £30,000 | £3,486 | £1,395 | £25,119 | £2,093 |
| £35,000 | £4,486 | £1,795 | £28,719 | £2,393 |
| £40,000 | £5,486 | £2,195 | £32,319 | £2,693 |
| £50,000 | £7,486 | £2,994 | £39,520 | £3,293 |
| £60,000 | £11,432 | £3,194 | £45,374 | £3,781 |
| £75,000 | £17,432 | £3,494 | £54,074 | £4,506 |
| £100,000 | £27,432 | £3,994 | £68,574 | £5,715 |
Scottish Income Tax Rates 2025/26
Scotland sets its own income tax rates, which differ from the rest of the UK:
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter Rate | £12,571 to £15,397 | 19% |
| Basic Rate | £15,398 to £27,491 | 20% |
| Intermediate Rate | £27,492 to £43,662 | 21% |
| Higher Rate | £43,663 to £75,000 | 42% |
| Advanced Rate | £75,001 to £125,140 | 45% |
| Top Rate | Over £125,140 | 48% |
Tax-Efficient Strategies
Pension Contributions
Salary sacrifice into a pension reduces your taxable income:
- Get tax relief at your marginal rate (20%, 40%, or 45%)
- Also saves National Insurance
- Can restore personal allowance if earning over £100,000
ISA Allowance
Save up to £20,000 per year in ISAs with tax-free growth and withdrawals:
- Cash ISA
- Stocks & Shares ISA
- Innovative Finance ISA
- Lifetime ISA (up to £4,000/year with 25% bonus)
Marriage Allowance
Transfer £1,260 of personal allowance to a spouse/civil partner if:
- You earn less than £12,570
- Your partner is a basic rate taxpayer
- Worth up to £252 per year
Understanding Your Payslip
Common payslip deductions explained:
- PAYE (Income Tax): Tax collected by your employer
- NI (National Insurance): Employee contributions
- Pension: Workplace pension contribution
- Student Loan: If applicable (Plan 1, 2, or Postgraduate)
Tax Codes
Your tax code tells your employer how much tax-free allowance you get:
- 1257L: Standard tax code (£12,570 allowance)
- BR: All income taxed at basic rate (no allowance)
- D0: All income taxed at higher rate
- NT: No tax (rare, for specific circumstances)
Self-Assessment and Filing
You must file a Self Assessment tax return if you:
- Are self-employed with income over £1,000
- Have income over £100,000
- Receive rental income
- Have significant savings/investment income
- Receive foreign income
- Are a company director
Key Dates
- 5 October: Register for Self Assessment (if new)
- 31 October: Paper return deadline
- 31 January: Online return and payment deadline
- 31 July: Second payment on account (if applicable)
Using Our Tax Calculator
Our free UK tax calculator shows you:
- Income tax breakdown by band
- National Insurance contributions
- Take-home pay (annual and monthly)
- Scottish tax option
- Student loan deductions
- Pension contribution effects
Calculate Your Tax
Use our free UK Tax Calculator to see your take-home pay!
Conclusion
Understanding UK income tax helps you plan your finances and potentially reduce your tax bill through legitimate strategies. Key points to remember:
- Personal allowance is £12,570 (reduces over £100,000 income)
- Basic rate is 20%, higher rate is 40%, additional rate is 45%
- National Insurance adds to your deductions
- Pension contributions can significantly reduce tax
- Check your tax code is correct
Disclaimer: Tax rules can change. Always verify current rates with HMRC or a qualified tax professional.
UK Income Tax 2025/26: Comprehensive Guide to Rates and Allowances
The UK income tax system for the 2025/26 tax year (6 April 2025 to 5 April 2026) operates on a progressive basis, meaning higher portions of your income are taxed at higher rates. Understanding the current rates, thresholds, and available allowances is essential for effective financial planning and ensuring you are not overpaying tax.
The Personal Allowance for 2025/26 remains at £12,570, which is the amount of income you can earn before paying any income tax. This allowance has been frozen since 2021/22 and will remain frozen until at least April 2028 as part of the government's fiscal drag policy. As wages increase through inflation, more of people's income falls into taxable bands, effectively increasing the tax burden without changing the headline rates.
Above the Personal Allowance, income is taxed at three main rates: the Basic Rate of 20% on income from £12,571 to £50,270, the Higher Rate of 40% on income from £50,271 to £125,140, and the Additional Rate of 45% on income over £125,140. There is also a hidden tax trap known as the 60% tax band: for every £2 earned above £100,000, £1 of Personal Allowance is lost, creating an effective marginal tax rate of 60% on income between £100,000 and £125,140.
National Insurance and Total Tax Burden
Income tax tells only part of the story. National Insurance contributions (NICs) add a further layer of deductions. For employees in 2025/26, Class 1 NICs are charged at 8% on earnings between £12,570 and £50,270, and 2% on earnings above £50,270. Self-employed individuals pay Class 4 NICs at 6% and 2% on the same thresholds. When combined with income tax, a basic rate taxpayer actually loses 28% of each additional pound earned (20% tax + 8% NICs), while a higher rate taxpayer loses 42% (40% + 2%).
Scotland has its own income tax rates, which differ from the rest of the UK. Scottish taxpayers face six bands: Starter (19%), Basic (20%), Intermediate (21%), Higher (42%), Advanced (45%), and Top Rate (48%). These rates apply to non-savings, non-dividend income only. The Scottish system results in higher effective tax rates for most earners above £28,867 compared to the rest of the UK, but slightly lower rates for the lowest earners.
Strategies to Reduce Your UK Income Tax
Pension contributions are one of the most effective ways to reduce your income tax bill. Contributions to workplace or personal pensions receive tax relief at your marginal rate. A higher rate taxpayer contributing £10,000 to a pension effectively costs only £6,000 after tax relief. For those caught in the 60% tax band (£100,000-£125,140), pension contributions can be particularly valuable, as £1,000 contributed effectively costs just £400. Salary sacrifice pension arrangements can also save on National Insurance contributions for both employee and employer.
Other tax-efficient strategies include maximising your ISA allowance (£20,000 per year in 2025/26) to shelter savings and investment income from tax, using the Marriage Allowance to transfer £1,260 of unused Personal Allowance to a basic rate taxpayer spouse (saving up to £252 per year), and ensuring you claim all eligible expenses if self-employed. Check your PAYE tax code each year to ensure it correctly reflects your allowances and deductions.
What is the 60% tax trap and how can I avoid it?
When your income exceeds £100,000, your Personal Allowance of £12,570 is reduced by £1 for every £2 of income above £100,000. This means income between £100,000 and £125,140 is effectively taxed at 60% (40% income tax plus the loss of allowance). The most common strategy to avoid this is making pension contributions that bring your adjusted net income below £100,000, effectively recovering the full Personal Allowance while building retirement savings.
Do I need to file a Self Assessment tax return?
You must file a Self Assessment return if you are self-employed with income over £1,000, if your total income exceeds £150,000, if you have untaxed income (such as rental income, foreign income, or significant savings interest), if you are a company director, or if you need to claim certain tax reliefs. PAYE employees with straightforward tax affairs generally do not need to file. The deadline for online Self Assessment returns is 31 January following the end of the tax year.
How does the Marriage Allowance work?
The Marriage Allowance allows a spouse or civil partner who earns less than the Personal Allowance (£12,570) to transfer up to £1,260 of their unused allowance to their partner, provided the receiving partner is a basic rate taxpayer. This saves the couple up to £252 per year in income tax. You can backdate a claim for up to four previous tax years, potentially recovering over £1,000 in total. Apply online through HMRC's website; it takes about 10 minutes.
James Mitchell, ACCA
Chartered Accountant & Former HMRC Advisor
James is a Chartered Certified Accountant (ACCA) specialising in UK personal taxation and financial planning. With over 12 years in practice and a background as a former HMRC compliance officer, he brings authoritative insight to complex tax topics.