See exactly how your income splits across tax bands — with a visual breakdown.
Calculate Your Income Tax
£
£
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Total Income Tax
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Effective Rate
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Marginal Rate
How Your Income Is Taxed
Personal Allowance (0%)£12,570
Basic Rate (20%)—
Higher Rate (40%)—
Additional Rate (45%)—
Tax freeBasic (20%)Higher (40%)Additional (45%)
Band
Income in Band
Rate
Tax
Personal Allowance
—
0%
£0
Basic Rate
—
20%
—
Higher Rate
—
40%
—
Additional Rate
—
45%
—
Total Income Tax
—
Understanding UK Income Tax Bands
Income tax is charged on a marginal basis — you pay each rate only on the slice of income that falls within that band. Crossing into the higher-rate band does not mean paying 40% on your entire salary; it means paying 40% only on the earnings above £50,270.
The 2026/27 Tax Bands
Personal Allowance (0%): The first £12,570 of income is tax-free for most people.
Basic Rate (20%): Earnings from £12,571 to £50,270 are taxed at 20%.
Higher Rate (40%): Earnings from £50,271 to £125,140 are taxed at 40%.
Additional Rate (45%): Earnings above £125,140 are taxed at 45%.
The Personal Allowance Taper
If your income exceeds £100,000, your personal allowance is withdrawn at £1 for every £2 above £100,000. At £125,140 the allowance is fully gone. This creates an effective 60% marginal rate in the £100,000–£125,140 range — making pension contributions especially valuable for earners in this band.
Income tax applies to earnings from employment, self-employment profits, pensions (state and private), rental income, savings interest above the personal savings allowance, and dividends above the dividend allowance. Capital gains are taxed separately under CGT rules.
For employees, income tax is deducted at source through PAYE (Pay As You Earn) before you receive your salary. Self-employed individuals pay via Self Assessment — submitting a tax return each year and paying the resulting bill, usually by 31 January.
Yes. The most effective way is salary sacrifice pension contributions — these reduce your taxable income before tax is calculated, saving at your marginal rate. Gift Aid donations, trading losses, and Marriage Allowance can also reduce your tax bill. Higher-rate and additional-rate taxpayers can claim extra relief via Self Assessment.