See which income tax band you're in for 2025/26. Calculate how much tax you pay at each rate — 20%, 40%, 45% — plus Scottish rates and personal allowance.
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Find out exactly which income tax bands apply to your salary and how much tax you pay at each rate. The UK uses a banded system — you only pay higher rates on the portion of income in each band, not your entire salary.
UK income tax rates 2025/26 (England, Wales, NI): Personal allowance = £12,570 (0%), Basic rate = 20% on £12,571-£50,270, Higher rate = 40% on £50,271-£125,140, Additional rate = 45% on income above £125,140. Remember: you only pay each rate on the income in that band, not your entire salary.
Do I pay 40% tax on all my income if I earn over £50,270?
No — this is a common misconception. If you earn £60,000, you pay: 0% on first £12,570 (personal allowance), 20% on £12,571-£50,270 (£37,700 in band = £7,540 tax), 40% only on £50,271-£60,000 (£9,730 in band = £3,892 tax). Total = £11,432 income tax. Your effective rate is 19%, not 40%.
What is the personal allowance and who gets it?
The personal allowance is £12,570 for 2025/26 — the amount you earn before paying any income tax. Most UK residents get the full allowance. It reduces by £1 for every £2 you earn above £100,000, disappearing at £125,140. Non-UK residents may get a different allowance or none at all, depending on their tax treaty status.
What are Scottish income tax rates for 2025/26?
Scotland has 6 bands for 2025/26: Starter rate 19% (£12,571-£14,876), Basic rate 20% (£14,877-£26,561), Intermediate rate 21% (£26,562-£43,662), Higher rate 42% (£43,663-£75,000), Advanced rate 45% (£75,001-£125,140), Top rate 47% (above £125,140). Scottish rates apply to your salary and self-employment income, but NOT to dividends or savings interest.
When does the personal allowance get reduced?
Your personal allowance is reduced when your adjusted net income exceeds £100,000. For every £2 over £100,000, you lose £1 of personal allowance. At £125,140, the personal allowance is zero. This creates an effective 60% marginal tax rate on income between £100,000 and £125,140 — making pension contributions especially valuable in this range.
What is the basic rate limit for 2025/26?
The basic rate band is £37,700 for 2025/26 — the band from your personal allowance (£12,570) to £50,270 total income. You pay 20% tax on this £37,700. The basic rate limit has been frozen since 2021/22 and will remain until April 2028, meaning fiscal drag pushes more people into higher bands each year as wages rise.
How do I reduce my income tax in the UK?
Legal ways to reduce UK income tax: (1) Pension contributions — these reduce your taxable income pound for pound and attract basic or higher rate relief. (2) ISA savings — income and gains in ISAs are tax-free. (3) Gift Aid donations — extend your basic rate band. (4) Marriage allowance — transfer £1,260 of allowance between spouses if one doesn't use theirs. (5) Salary sacrifice — exchange salary for non-cash benefits.
What is the difference between marginal and effective tax rate?
Your marginal tax rate is the rate on your last pound earned (e.g., 40% if you're a higher rate taxpayer). Your effective rate is your total tax as a percentage of total income — always lower than your marginal rate. Example: £60,000 earner pays £11,432 income tax = 19% effective rate, despite being in the 40% band.