Savings Interest Tax Calculator UK
Estimate whether your savings or bond interest exceeds your Personal Savings Allowance and if HMRC may adjust your PAYE tax code to collect tax on interest.
Calculator
What this means
The Personal Savings Allowance lets basic-rate taxpayers earn £1,000 in interest tax-free (£500 for higher rate, £0 for additional rate). If your savings interest exceeds this, HMRC may collect the tax by adjusting your PAYE tax code so more is deducted from your salary each month.
How to use this calculator
- Enter your salary and your expected savings interest for the year.
- The calculator applies your Personal Savings Allowance based on your tax band.
- See how much of your interest is tax-free and how much tax may be due.
Worked example
A basic-rate taxpayer earns £600 of savings interest in a year.
- Basic-rate taxpayers get a £1,000 Personal Savings Allowance.
- £600 is below £1,000, so all of it is tax-free.
No tax is due on the £600 of interest.
Who this is for
- Savers with money outside an ISA.
- People who have moved into the higher-rate band and lost allowance.
- Anyone checking whether savings interest creates a tax bill.
The Personal Savings Allowance explained
The Personal Savings Allowance lets basic-rate taxpayers earn £1,000 of savings interest tax-free each year, falling to £500 for higher-rate taxpayers and £0 for additional-rate taxpayers.
Interest inside an ISA is always tax-free and does not count towards the allowance. Low earners may also benefit from the separate starting rate for savings of up to £5,000.
Frequently asked questions
If you owe tax on savings interest, HMRC often collects it through PAYE by reducing your personal allowance in your tax code. Banks report interest to HMRC automatically.
For 2026/27, basic-rate taxpayers can earn £1,000 in interest tax-free, higher-rate taxpayers £500, and additional-rate taxpayers get no allowance.
No. Interest earned inside an ISA is tax-free and does not count towards your Personal Savings Allowance or trigger a tax code change.
No. Interest earned inside a cash ISA or stocks and shares ISA is completely tax-free and does not use up your Personal Savings Allowance.
Banks report interest to HMRC, which usually collects any tax due by adjusting your tax code. If you complete Self Assessment, you report it there instead.
Disclaimer
This calculator provides estimates for guidance only. It is not financial, legal or tax advice. Always check official sources or speak to a qualified professional before making decisions.
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