In 2025/26, the first £12,570 you earn is tax-free (the personal allowance). In England, Wales and Northern Ireland, income between £12,570 and £50,270 is taxed at the 20% basic rate, income between £50,270 and £125,140 at the 40% higher rate, and anything above £125,140 at the 45% additional rate. Scotland has six bands from 19% to 48%. The personal allowance is withdrawn for incomes over £100,000.
The personal allowance comes first
Before any tax band applies, you get a personal allowance — an amount you can earn each year completely tax-free. For 2025/26 it is £12,570 for most people. Only income above your allowance is taxed, and the bands below all measure from the top of it.
Your allowance can be higher or lower than £12,570: marriage allowance can raise it, company benefits or unpaid tax can reduce it, and — as covered below — it is withdrawn entirely once you earn over £100,000. Your tax code tells your employer which allowance to use.
England, Wales and Northern Ireland bands
If you live in England, Wales or Northern Ireland, three tax rates apply above your personal allowance in 2025/26:
| Band | Taxable income | Rate |
|---|---|---|
| Personal allowance | £0 – £12,570 | 0% |
| Basic rate | £12,570 – £50,270 | 20% |
| Higher rate | £50,270 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
The bands are cumulative: you only pay 40% on the part of your income above £50,270, not on all of it. Someone earning £60,000 pays 40% on roughly £9,730 — not on the whole salary. Reaching the £50,270 higher-rate threshold is a common milestone; you can see exactly what it means at £50k on our salary pages.
Scottish income tax bands
If your main home is in Scotland, your earned income is taxed under the Scottish system, which has six bands for 2025/26 rather than three. Your tax code starts with S. The £12,570 personal allowance is the same, but the rates and thresholds differ:
| Band | Taxable income | Rate |
|---|---|---|
| Starter Rate | £12,570 – £15,397 | 19% |
| Basic Rate | £15,397 – £27,491 | 20% |
| Intermediate Rate | £27,491 – £43,662 | 21% |
| Higher Rate | £43,662 – £75,000 | 42% |
| Advanced Rate | £75,000 – £125,140 | 45% |
| Top Rate | £125,140+ | 48% |
The headline difference is where higher-rate tax starts: Scotland’s 42% band begins at £43,662, nearly £6,608 earlier than the rest of the UK. Our Scottish tax bands guide works through the difference in pounds.
The £100,000 personal allowance taper
Once your income passes £100,000, your personal allowance is withdrawn by £1 for every £2 you earn above that figure. By £125,140 it has gone entirely. Because you lose tax-free allowance and pay 40% on the income itself, the effective rate in this zone is 60% (or 63% once National Insurance is counted) — the so-called 60% tax trap.
On £110,000 in 2025/26, the taper has removed £5,000 of the allowance (£1 for every £2 above £100,000), leaving £7,570. The income tax bill is £33,432.00 — far more than the 40% headline would suggest, precisely because the allowance is shrinking as you earn. A pension contribution that brings you back under £100,000 claws the whole allowance back.
Why the thresholds feel like they’re rising: fiscal drag
The personal allowance and the higher-rate threshold have been frozen since April 2021 and are currently set to stay frozen until April 2028. When thresholds don’t move but wages do, more of your pay is dragged into higher bands each year — a stealth tax increase known as fiscal drag. It is why a pay rise can feel like it barely touches your take-home, and why more people cross into the 40% band every year without their circumstances really changing.
Savings and dividends are taxed separately
The bands above apply to earned income — your salary, pension or self-employment profit. Interest and dividends sit on top but have their own tax-free allowances first. In 2025/26 the personal savings allowance lets basic-rate taxpayers earn £1,000 of interest tax-free (higher-rate: £500, additional-rate: nil), and everyone gets a £500dividend allowance. Above those, savings interest is taxed at your normal band rates, while dividends have their own lower rates (8.75%, 33.75% and 39.35%). It’s why two people on the same salary can pay very different total tax once investments are counted — and why our calculator focuses on employment income, where the bands above apply cleanly.
Marriage allowance can shift a band
If one partner earns below the personal allowance and the other is a basic-rate taxpayer, marriage allowance lets the lower earner transfer £1,257 of their allowance — worth up to £251a year in tax. It’s one of the most commonly missed reliefs. It cannot be used if the higher earner pays tax above the basic rate.
See these bands on your own salary
Enter your salary and our calculator applies the exact bands above — including the Scottish rates and the £100k taper — to show your real take-home pay.
Open the calculator