Income tax rates and bands
The UK taxes income above the Personal Allowance on a set of bands — but only the income within each band is taxed at that band’s rate, not your whole salary. This page shows the 2026/27 rest-of-UK bands and how the Personal Allowance taper above £100,000 creates the well-known 60% effective marginal band. Wales currently matches the rest of the UK.
Bands, not a single rate
The UK taxes your income in bands above the tax-free Personal Allowance of £12,570. Each band is taxed at its own rate — but only the income inside that band, never your whole salary. Earning into a higher band never lowers your take-home; only the slice above each threshold is taxed at the higher rate.
For the rest of the UK (England, Wales and Northern Ireland) the basic rate of 20% runs from the allowance up to £50,270; the higher rate applies up to £125,140; and the additional rate of 45% applies above that. Your employer withholds this through PAYE, so most employees never file to work it out.
Rest-of-UK bands
The rates below apply to taxable income — the income left after your Personal Allowance is taken off. National Insurance is charged separately (see that page).
| Taxable income | Rate |
|---|---|
| Personal Allowance — up to £12,570 of total income | Nil |
| Up to £37,700 | 20% |
| £37,700 – £125,140 | 40% |
| Over £125,140 | 45% |
Taxable income, and how your tax code carries it
Income tax is charged on your taxable income, not your headline salary. Take your gross pay, subtract your Personal Allowance (and any pension paid before tax), and what’s left is run through the bands above. So on the standard allowance of £12,570, the first slice of your salary is tax-free and only the balance is taxed — which is why two people on the same gross can pay different tax once allowances differ.
Under PAYE you never work this out yourself: your tax code tells your employer how much allowance to give you, spread evenly across the year. The digits are the shorthand — multiply them by ten and you get your tax-free amount, so the standard code 1257L stands for exactly £12,570. The letter carries the rules: an “S” prefix puts you on the Scottish scale, a “K” code adds notional income instead of an allowance (to collect tax on benefits, say), and flat codes such as BR, D0 or 0T tax your income at a single rate with no allowance. The calculator accepts a code and applies it literally, exactly as a payroll would.
The 60% effective band
Above £100,000 your Personal Allowance is withdrawn by £1 for every £2 you earn, disappearing entirely at £125,140. On top of higher-rate tax, that withdrawal makes each extra pound in this range cost about 60% (67.5% on the Scottish scale) — the well-known effective marginal band, higher than the headline top rate of 45%. The calculator models the allowance as a function of income and taxes what’s left, so the band emerges automatically.
Wales (the Welsh Rate of Income Tax) currently matches the rest of the UK for 2026/27; the Senedd may diverge in future. The figures on this page come from GOV.UK and HMRC and are cited where they are used. If a rate changed recently it may not be reflected here yet — for an official amount, check the cited source or ask HMRC.