UK Income Tax Bands Explained (2026/27)

What are the UK income tax bands for 2026/27?

For 2026/27 the rest-of-UK income tax bands are: a 0% Personal Allowance on the first £12,570, a 20% basic rate from £12,570 to £50,270, a 40% higher rate from £50,270 to £125,140, and a 45% additional rate above £125,140. These thresholds are frozen and unchanged from recent years.

Crucially, the rates apply slice by slice. If you earn £60,000 you do not pay 40% on all of it — you pay 0% on the first £12,570, 20% on the next £37,700, and 40% only on the £9,730 above £50,270.

How the Personal Allowance works

The Personal Allowance is the amount you can earn each year before paying any income tax — £12,570 for most people in 2026/27. It is built into your tax code (usually 1257L), which tells your employer how much tax-free pay to give you each month.

Your allowance can be smaller or larger than the standard figure. It is reduced if you owe tax from elsewhere or earn over £100,000, and it can be increased slightly if you receive Marriage Allowance from a partner.

Why only the slice in each band is taxed

The single biggest misunderstanding about tax bands is the fear that earning a bit more will push 'all' your income into a higher rate. That is not how it works. Each band only taxes the portion of income that falls within it — this is called marginal taxation.

Moving into the 40% band means your next pound is taxed at 40%, not your whole salary. A pay rise always leaves you with more money in your pocket, even if a slice of it is taxed at a higher rate.

• First £12,570: taxed at 0% (Personal Allowance).
• £12,570–£50,270: taxed at 20% (basic rate).
• £50,270–£125,140: taxed at 40% (higher rate).
• Above £125,140: taxed at 45% (additional rate).

The higher-rate threshold at £50,270

Once your income passes £50,270 you become a higher-rate taxpayer, and the slice above that line is taxed at 40%. Because the threshold has been frozen while wages rise, more people are being pulled into the higher rate over time — an effect known as fiscal drag.

Crossing £50,270 can also trigger other changes, such as the High Income Child Benefit Charge starting to bite and your Personal Savings Allowance halving from £1,000 to £500.

The 60% tax trap between £100,000 and £125,140

Above £100,000 your Personal Allowance is reduced by £1 for every £2 you earn, disappearing completely at £125,140. Losing tax-free allowance while also paying 40% on the extra income creates an effective marginal rate of about 60% on earnings in this band.

This is why many people earning just over £100,000 use pension contributions or salary sacrifice to bring their 'adjusted net income' back below £100,000 and reclaim the allowance. For personal planning, speak to a qualified adviser.

A worked example: tax on a £60,000 salary

Take a £60,000 salary in 2026/27 with a standard tax code. The first £12,570 is tax-free. The next £37,700 (from £12,570 to £50,270) is taxed at 20%, which is £7,540. The final £9,730 (from £50,270 to £60,000) is taxed at 40%, which is £3,892.

Total income tax is about £11,432 — an overall, or effective, tax rate of roughly 19%, even though the person is a 'higher-rate taxpayer'. National Insurance is charged separately on top of this.

Income tax bands are different in Scotland

If you live in Scotland, the Scottish Government sets income tax rates on earnings (though savings and dividend income still use UK-wide rates). Scotland has more bands — including a 19% starter rate and a 45%–48% top end — so the scale differs from the rest of the UK.

Your Personal Allowance is the same £12,570 across the UK, and a Scottish taxpayer's tax code starts with an 'S'. Welsh rates currently mirror the rest of the UK.

What income counts towards the bands?

Income tax applies to earnings from employment and self-employment, pensions, rental profit, and most taxable benefits. Savings interest and dividends are taxed too, but they have their own allowances (the Personal Savings Allowance and Dividend Allowance) and sit on top of your other income.

National Insurance is not income tax — it is a separate deduction with its own thresholds. That is why your payslip shows income tax and National Insurance as two different lines.

Work out the tax on your income

Use our Income Tax Calculator UK to see exactly how your salary is split across the 2026/27 bands and how much income tax you owe. For your full take-home pay including National Insurance and pension, try the PAYE Salary Calculator. Estimates only — check GOV.UK and your payslip for official figures.