How UKCalc calculates income tax, National Insurance, take-home pay and other UK financial figures for 2026/27.
Every rate and threshold used on UKCalc is reviewed against the official published source — HMRC and GOV.UK for tax and National Insurance, the Scottish Government for Scottish income tax bands, the Bank of England for interest-rate context, and the ONS for earnings data. Each page shows a "Last reviewed" date in the editor's note near the footer; the date above reflects the most recent sitewide review. When a rate changes mid-year, we update the affected calculators and guides and note the change in our review cycle rather than leaving stale figures in place. If you spot a figure that doesn't match the official source, tell us — reported discrepancies are checked within 24 hours.
The figures behind these methods. The full verified set — 152 values with sources, effective dates and verification dates — is published as UK rates and thresholds 2026/27.
UK income tax is marginal — each rate applies only to the slice of income within that band, not to all income. Our calculators apply the following 2026/27 rates for England, Wales and Northern Ireland:
| Band | Taxable Income | Rate | Source |
|---|---|---|---|
| Personal Allowance | Up to £12,570 | 0% | GOV.UK |
| Basic Rate | £12,571 – £50,270 | 20% | GOV.UK |
| Higher Rate | £50,271 – £125,140 | 40% | GOV.UK |
| Additional Rate | Above £125,140 | 45% | GOV.UK |
For incomes above £100,000, the personal allowance is reduced by £1 for every £2 of income above £100,000. The Personal Allowance taper creates a 60% marginal Income Tax rate right across £100,000 to £125,140. Employee National Insurance lifts the combined marginal deduction to 62%. The 60% and 62% figures are UKCalc calculations on top of published HMRC rates, not published HMRC tax bands. At £125,140 the personal allowance is fully withdrawn.
Corrected 9 September 2026. An earlier version of UKCalc's calculation engine derived the higher-rate band incorrectly during the Personal Allowance taper, by deducting the Personal Allowance from a threshold that already excluded it. That produced a reported band of 67.5% Income Tax (69.5% including employee National Insurance) between £116,760 and £125,140, and overstated Income Tax by up to £628.50 at incomes at and above £125,140. No such band exists. The engine, the affected calculators and every published example have been corrected, and known-answer tests derived independently of the engine now pin the result. See the marginal tax rate map.
Personal allowance (£12,570) → £0 tax
Basic rate band (£12,571–£50,270 = £37,700 × 20%) → £7,540
Higher rate slice (£50,271–£55,000 = £4,730 × 40%) → £1,892
Total income tax: £9,432/year
Employee National Insurance contributions (NICs) for 2026/27 are:
| Band | Earnings | Rate | Source |
|---|---|---|---|
| Below Primary Threshold | Up to £12,570/year | 0% | GOV.UK |
| Main Rate | £12,570 – £50,270/year | 8% | GOV.UK |
| Upper Rate | Above £50,270/year | 2% | GOV.UK |
NI on £12,570–£50,000 = £37,430 × 8% → £2,994
Total employee NI: £2,994/year
We calculate take-home pay by applying deductions in this order:
Default assumptions: Standard 1257L tax code (full personal allowance of £12,570). No additional income sources. No benefits in kind. Single employer. The user can override these by adjusting the pension contribution field and student loan plan selector.
| Plan | Threshold (2026/27) | Rate | Source |
|---|---|---|---|
| Plan 1 | £26,900/year | 9% above threshold | HMRC |
| Plan 2 | £29,385/year | 9% above threshold | HMRC |
| Plan 4 (Scotland) | £33,795/year | 9% above threshold | HMRC |
| Plan 5 | £25,000/year | 9% above threshold | HMRC |
| Postgraduate Loan | £21,000/year | 6% above threshold | HMRC |
Salary sacrifice pension contributions are deducted from gross salary before income tax and National Insurance are calculated. This means both taxes are reduced — unlike personal pension contributions (relief at source), which only save income tax.
Gross salary: £35,000
Salary sacrifice contribution (5%): £1,750
Adjusted taxable salary: £33,250
Income tax on £33,250: 20% × (£33,250 − £12,570) = 20% × £20,680 = £4,136
NI on £33,250: 8% × (£33,250 − £12,570) = 8% × £20,680 = £1,654
Monthly take-home: (£35,000 − £1,750 − £4,136 − £1,654) ÷ 12 = £2,288/month
Our stamp duty calculator uses the 2026/27 SDLT rates for England and Northern Ireland:
| Purchase Price | Standard Rate | First-Time Buyer Rate |
|---|---|---|
| Up to £125,000 | 0% | 0% (relief to £300,000) |
| £125,001 – £250,000 | 2% | 0% (relief to £300,000) |
| £250,001 – £300,000 | 5% | 0% (relief to £300,000) |
| £300,001 – £500,000 | 5% | 5% |
| £500,001 – £925,000 | 5% | No relief above £500,000 |
| £925,001 – £1,500,000 | 10% | No relief above £500,000 |
| Above £1,500,000 | 12% | No relief above £500,000 |
Source: GOV.UK — Stamp Duty Land Tax. Our calculator assumes a standard residential purchase. Additional-rate surcharges (for second homes/buy-to-let) are not currently included — confirm with a conveyancer for non-standard purchases.
Our mortgage calculator uses the standard annuity repayment formula. For a mortgage of principal P, monthly interest rate r (annual rate ÷ 12), and n monthly payments:
Monthly payment = P × r × (1+r)^n / ((1+r)^n − 1)
Interest rates shown are illustrative. Actual mortgage rates depend on your lender, LTV, credit history and market conditions. We use Bank of England base rate publications as a reference for rate context.
Our car finance calculator uses the same annuity formula for Hire Purchase (HP) monthly payments, applied to the full vehicle price minus deposit. For Personal Contract Purchase (PCP), monthly payments are calculated on the amount financed between the purchase price and the Guaranteed Minimum Future Value (GMFV / balloon payment), using the same annuity formula.
What our calculators do not account for: Non-standard tax codes · Multiple employment income or self-employment · Benefits in kind (company cars, private medical insurance, etc.) · Scottish income tax (which has different rates and bands) · Marriage allowance transfers · Pension income alongside employment income · Blind Person's Allowance · Gift Aid adjustments to adjusted net income. If any of these apply to you, your actual tax will differ from our estimates.