UK Income Tax 2025/26: Personal Allowance, Bands and Take-Home Pay Explained

UK income tax is progressive, with a tax-free personal allowance followed by three main rates. Here is how it works for the 2025/26 tax year for England, Wales and Northern Ireland.

The Personal Allowance

Everyone gets a personal allowance of £12,570, which is tax-free. You only pay income tax on earnings above this amount.

However, if you earn over £100,000 the allowance tapers away. It drops by £1 for every £2 you earn above £100,000, and it disappears completely at £125,140. This creates a high effective tax rate between those two figures.

The 2025/26 Tax Bands

Band	Taxable income	Rate
Basic rate	Up to £37,700	20%
Higher rate	£37,701 to £125,140	40%
Additional rate	Over £125,140	45%

These thresholds are based on taxable income, which is your gross income minus the personal allowance.

Example: earn £55,000. Subtract the £12,570 allowance and your taxable income is £42,430. The first £37,700 is taxed at 20% and the remaining £4,730 at 40%.

Scotland Is Different

Scotland has its own income tax bands and rates, including a starter rate and an intermediate rate. This guide and the calculator use the rates for England, Wales and Northern Ireland.

What About National Insurance?

Income tax and National Insurance are separate. As an employee you pay 8% National Insurance on earnings between £12,570 and £50,270, and 2% on everything above that. Estimate it with the UK National Insurance Calculator.

Estimate Your UK Income Tax

Use the free UK Income Tax Calculator. Enter your annual salary and it applies the personal allowance, the taper and the bands to show:

• Your taxable income
• Total income tax
• Your effective and marginal rate
• A band-by-band breakdown of tax per slice of income

All UK Tax Tools in One Place

The UK Tax Calculators hub collects the income tax, National Insurance and VAT calculators together so you can work out your full position. If you are invoicing, use the UK VAT Calculator to add or remove VAT at 20%.