About this calculator
For 2026/27, employment income in England, Wales and Northern Ireland is taxed at 20% on the first £37,700 above your Personal Allowance, 40% up to £125,140 of taxable income, and 45% beyond. The Personal Allowance is £12,570 for most people — but it is withdrawn by £1 for every £2 of income over £100,000, so between £100,000 and £125,140 your effective marginal income-tax rate is 60%, before National Insurance and student loans join in. Employee NI adds 8% on earnings between £12,570 and £50,270 and 2% above that.
These thresholds have been frozen since 2021/22, and the November 2025 Budget extended the freeze to April 2031 — which is why “fiscal drag” keeps pulling pay rises into higher bands even though no rate has changed. Scotland sets its own income tax bands: for 2026/27, starter 19% on the first £3,967 of taxable income, basic 20% to £16,956, intermediate 21% to £31,092, higher 42% to £62,430, advanced 45% to £112,570, and top 48% above — use the residence selector at the top for those bands. NI, the Personal Allowance and its taper are UK-wide either way, and the taper-zone marginal rate is higher in Scotland (63% in the higher band, 67.5% in the advanced band) because the allowance is withdrawn against higher Scottish rates.
How to use it
- Pick your tax residence (Scotland has its own bands), then enter your gross monthly salary — annual salary is monthly × 12.
- If you pay into a pension, choose how: net pay arrangement (deducted before tax, most workplace schemes) or salary sacrifice — then enter your own yearly contribution.
- Add your student loan plan if you have one.
- Read the tax, NI, and take-home lines; drag the salary past £100,000 to watch the Personal Allowance taper bite.
The formula
Pension relief differs by mode and it matters: under a net pay arrangement your contribution comes off before income tax (and lowers your adjusted net income for the taper), but NI is still charged on the full salary. Under salary sacrifice your contractual salary itself is lower, so you save both tax and NI — and a sacrifice that pulls adjusted net income back under £100,000 restores Personal Allowance pound for pound of taper. Student loan repayments are charged on pay after any salary sacrifice.
Worked example
A £4,166.67 monthly salary (£50,000 a year) with no pension and no student loan: Personal Allowance £12,570 leaves £37,430 taxable, all at 20% — income tax £7,486.00. NI is (£50,000 − £12,570) × 8% = £2,994.40. Total deductions £10,480.40 (20.96% of gross), take-home pay £39,519.60 for the year, about £3,293 a month. In Scotland the same £50,000 pays £8,982.05 of income tax (starter £753.73 + basic £2,597.80 + intermediate £2,968.56 + higher £2,661.96) and takes home £38,023.55, about £3,169 a month.
Sources: gov.uk — Income Tax rates and allowances; HMRC rates and thresholds for employers 2026 to 2027; Budget 2025 overview of tax legislation and rates (OOTLAR Annex A); student loan repayment thresholds (gov.uk); Scottish Budget 2026–27 (gov.scot, Table 2.01) and mygov.scot current rates for the Scottish bands. Verified October 2026. Last updated: October 2026.
Frequently asked questions
Why is the marginal rate 60% between £100,000 and £125,140?
Because of the taper: every extra £2 of income in that zone removes £1 of Personal Allowance, so £2 of extra pay is taxed on £3 of income. At the 40% higher rate that is £1.20 of tax on £2 — a 60% effective income-tax rate — plus 2% NI, and 9% more if you repay a student loan, a combined marginal deduction rate of up to 71%. At £125,140 the allowance is fully gone and the marginal rate drops back to 47% (45% tax + 2% NI, plus any loan).
How much tax does the taper cost at £120,000?
At £120,000 the allowance falls by £10,000 (half of the £20,000 excess) to £2,570. Taxable income is £117,430: £37,700 at 20% (£7,540) plus £79,730 at 40% (£31,892) = £39,432 of income tax. With the full allowance the same salary would pay £35,432 — so the taper adds exactly £4,000, the lost £10,000 of allowance taxed at 40%. NI at £120,000 is £4,410.60, leaving take-home pay of £76,157.40.
Net pay or salary sacrifice — which is my pension?
Most large workplace schemes (and most auto-enrolment defaults) use a net pay arrangement: contributions leave your pay before tax, so you get full marginal-rate relief automatically, but NI is still charged on your unreduced salary. Salary sacrifice is a contractual pay cut swapped for employer pension contributions — it saves NI as well (8% or 2% for you, 15% for your employer, some of which generous employers pass on). Personal pensions are usually “relief at source” instead: 20% is added back by the provider and higher-rate relief is claimed separately — this calculator models the two payroll modes; treat relief-at-source results as the net pay figures minus the extra relief you would claim.
Do these figures change soon?
The rates and thresholds are frozen until April 2031 under Budget 2025, so 2026/27 figures are expected to hold for several years. One change is already legislated: from April 2029, only the first £2,000 a year of salary-sacrifice pension contributions stays exempt from NI (income tax relief is unaffected). Scottish taxpayers already pay different income tax bands set by the Scottish Parliament.
What about the High Income Child Benefit Charge and tax codes?
This calculator assumes the standard £12,570 allowance (tax code 1257L) and no benefits in kind, marriage allowance transfers or Child Benefit charge. The HICBC now starts at £60,000 (clawing back Child Benefit at 1% per £200 up to £80,000) and is collected through Self Assessment rather than payroll — if you claim Child Benefit and earn over £60,000, your true deduction rate is higher than shown here.
How does Scotland differ, exactly?
Only the income tax bands: 19% starter, 20% basic, 21% intermediate, 42% higher, 45% advanced, 48% top for 2026/27 (Scottish Budget 2026–27: starter and basic thresholds uprated 7.4%, higher bands frozen until 2028–29). Everything else is UK-wide: the £12,570 Personal Allowance and its taper, NI at 8%/2%, and savings and dividend tax (which stays reserved to the UK Parliament, so Scottish rates apply only to employment and other non-savings, non-dividend income — which is what this calculator models). Two nuances: pension relief follows your Scottish marginal rate, and relief-at-source schemes still add 20% automatically, with Scottish taxpayers claiming the difference (1% intermediate, 22% higher, 25% advanced, 28% top) via Self Assessment; and student loan Plan 4 follows the funding body (SAAS), not your current address — a Scottish-funded borrower keeps Plan 4 even after moving to England.
What formula does this UK Income Tax calculator use?
Annual salary = Monthly salary × 12; Personal Allowance = £12,570 − £1 per £2 of income over £100,000 (floor £0); Tax = 20% / 40% / 45% on taxable income bands (Scotland: 19% / 20% / 21% / 42% / 45% / 48% on taxable slices of £3,967 / £12,989 / £14,136 / £31,338 / £50,140 / above); NI = 8% of £12,570–£50,270 + 2% above Pension relief differs by mode and it matters: under a net pay arrangement your contribution comes off before income tax (and lowers your adjusted net income for the taper), but NI is still charged on the full salary. Under salary sacrifice your contractual salary itself is lower, so you save both tax and NI — and a sacrifice that pulls adjusted net income back under £100,000 restores Personal Allowance pound for pound of taper. Student loan repayments are charged on pay after any salary sacrifice. The worked example on this page applies the formula step by step with real numbers, so you can verify the result by hand.