The short answer
UK income tax bands for 2026/27: Personal Allowance, basic, higher and additional rates, the £100,000 taper and Scottish bands.
The UK income tax system is progressive: you pay a higher rate only on the slice of income that falls inside each band, never on your whole salary. For 2026/27, taxpayers in England, Wales and Northern Ireland generally have a £12,570 Personal Allowance, a 20% basic rate on the next £37,700, a 40% higher rate up to £125,140 of income after allowances, and a 45% additional rate above that. The interaction of the allowance taper, savings and dividend allowances, and Scottish rates means two people on identical salaries can face very different bills. Find your exact position with the Salary Calculator.
Understanding your bands matters for every financial decision: a pay rise that crosses £50,270 turns every extra pound into a 40% tax liability, while income between £100,000 and £125,140 suffers the 60% effective trap as the Personal Allowance disappears. This guide sets out the bands, the allowances that sit on top, and the examples that show how the maths really works.
£12,570 tax-free allowance
20% / 40% / 45% bands
The 60% trap returns
The 2026/27 Bands for England, Wales and Northern Ireland
| Band | Rate | Income after allowances / standard gross equivalent |
|---|---|---|
| Personal Allowance | 0% | £0 – £12,570 gross allowance |
| Basic rate | 20% | £1 – £37,700 after allowances / up to £50,270 gross with standard allowance |
| Higher rate | 40% | £37,701 – £125,140 after allowances |
| Additional rate | 45% | Over £125,140 after allowances |
The basic rate band itself is £37,700 wide; add the standard £12,570 allowance and you get the £50,270 point where higher-rate tax starts. The bands apply to all non-savings, non-dividend income — salary, self-employment profits, rental income and most pensions — and they are cumulative, so nobody pays 40% on the first pound above £12,570. The additional rate threshold of £125,140 is also where the standard Personal Allowance reaches zero, which is why the allowance and the bands are so closely connected.
The Personal Allowance Taper
Your £12,570 allowance reduces by £1 for every £2 of adjusted net income above £100,000, and is zero at £125,140. Adjusted net income is your total taxable income minus pension contributions and Gift Aid donations. Inside the taper band the maths is punishing: earn £1,000 extra and you lose £500 of allowance, so that £500 is dragged into the 40% band on top of the £1,000 itself being taxed at 40% — an effective 60% marginal rate, or 62% once 2% National Insurance is added.
| Adjusted net income | Personal Allowance | Effective marginal rate |
|---|---|---|
| £100,000 | £12,570 | 40% |
| £110,000 | £7,570 | 60% |
| £120,000 | £2,570 | 60% |
| £125,140+ | £0 | 45% |
The fix is pension contributions: every £2 contributed below £100,000 restores £1 of allowance, and the combined saving can make a contribution worth 60% relief. This is the single most valuable tax lever for high earners in 2026/27.
Real Examples
Example 1: £50,000 salary. All income sits in the basic rate band after the allowance.
| Component | Calculation | Amount |
|---|---|---|
| Tax-free | £12,570 × 0% | £0 |
| Basic rate | £37,430 × 20% | £7,486 |
| Total income tax | £7,486 | |
| Effective rate | £7,486 ÷ £50,000 | 15.0% |
Example 2: £60,000 salary. Now the higher-rate band applies to the £9,730 above £50,270.
| Component | Calculation | Amount |
|---|---|---|
| Basic rate | £37,700 × 20% | £7,540 |
| Higher rate | £9,730 × 40% | £3,892 |
| Total income tax | £11,432 | |
| Effective rate | £11,432 ÷ £60,000 | 19.1% |
The marginal rate at £60,000 is 40%, but the effective rate is 19.1% because so much income is taxed at 0% and 20%. The gap between the two numbers explains most of the confusion about UK tax — the headline rate is never what you actually pay overall.
Scottish Bands Are Different
If you are resident in Scotland for tax purposes, the Scottish Government sets its own income tax rates for non-savings and non-dividend income. Expressed as taxable income after allowances, the 2026/27 bands are 19% up to £3,967, 20% up to £16,956, 21% up to £31,092, 42% up to £62,430, 45% up to £125,140 and 48% above. GOV.UK's Scottish page also shows the equivalent gross-income thresholds for someone with the standard Personal Allowance. The Personal Allowance, the taper, National Insurance and student loans are separate rules, so the difference described here is the Scottish Income Tax bands. A Scottish taxpayer earning £40,000 can face a different bill from an English counterpart on the same salary because the Scottish bands differ.
Savings and Dividend Allowances
Income tax bands also interact with investment income. Savings interest benefits from a Personal Savings Allowance of £1,000 for basic-rate taxpayers, £500 for higher-rate and £0 for additional-rate, plus a £5,000 starting rate where other income is low. Dividends enjoy a £500 allowance, then are taxed at 10.75%, 35.75% and 39.35% in the basic, higher and additional bands for 2026/27. The band used for dividends and savings is decided by your total income after the Personal Allowance is allocated to earnings first, so a dividend payment can be taxed at the higher rate even when your salary alone would suggest the basic rate.
Marriage Allowance and Other Adjustments
The Marriage Allowance lets an eligible spouse or civil partner transfer up to £1,260 of unused Personal Allowance to their partner, normally saving up to £252 in England, Wales and Northern Ireland. The recipient must not be liable at the higher or additional rate; Scottish results can differ because the bands differ. Other adjustments shift the effective bands: the 2026/27 Blind Person's Allowance adds £3,250 to the tax-free amount, and pension contributions extend the basic rate band in the same way Gift Aid donations do. Each adjustment changes the income level at which higher-rate tax actually starts for you.
Planning Around the Band Edges
The two thresholds that matter most are £50,270 and £100,000. Just below each, consider pension contributions or salary sacrifice to stay under: a £1,000 pay rise from £50,270 to £51,270 costs £400 in extra income tax, so the effective value of sacrificing that amount into a pension is 40% plus NI savings. Just above £100,000, the allowance taper adds another 20% effective rate on top. Gift Aid donations extend your basic rate band and reduce adjusted net income in the same way as pension contributions, giving high earners a second planning tool before 5 April 2027.
How the Bands Apply to Pensions and Rental Income
Pension income is generally taxed in the same bands as salary, using any available Personal Allowance first. A person with no other taxable income may therefore have up to the standard allowance covered, but a pension is not automatically tax-free when other income has used the allowance. Rental income and self-employment profits also sit in the same bands on top of any salary, and they push income up the band structure. A landlord earning £40,000 from a job who adds £15,000 of rental profit sees £4,730 of that profit taxed at 40%, because the salary has already used the basic rate band. The same stacking logic applies to pension withdrawals alongside employment, so anyone with multiple income sources should total them before planning around any single threshold.
Action Plan for 2026/27
Use your bands to your advantage
- 1Calculate your adjusted net income, including bonuses, dividends and interest.
- 2Check which band you fall into — especially whether you are near £50,270 or £100,000.
- 3Model a pension contribution with the [Salary Calculator](/tools/salary-calculator) to see the marginal-rate saving.
- 4If you are Scottish, use the Scottish bands to estimate your tax before comparing roles or salaries.
- 5Review your tax code to make sure the allowances are being applied correctly through PAYE.
Check the calculation, not just the band
A tax band table is only one part of the calculation. Reconcile gross pay, benefits in kind, pension contributions, Gift Aid, savings interest, dividends, rental profit and taxable pension income for the whole tax year. Then separate Income Tax from National Insurance, student-loan deductions and workplace pension deductions. A payslip can show a temporary tax code or cumulative adjustment, while the annual liability uses the final income and reliefs.
For adjusted net income, keep evidence of pension contributions, Gift Aid certificates, taxable benefits and income received outside PAYE. If you are close to £100,000, calculate the figure before deciding that a bonus, dividend or salary sacrifice will leave you above or below the taper. If you are close to £50,270 or £125,140, show the amount in each band rather than multiplying the whole salary by one headline rate.
Scottish taxpayers should confirm their address and taxpayer status for the year and use the Scottish table for non-savings and non-dividend income. Someone who moves between nations during the year may need to check the statutory residence and Scottish taxpayer rules; do not switch tables simply because the employer or bank is based in a different part of the UK. For dividends, savings and foreign income, retain statements and apply the ordering rules before choosing the rate.
Finally, compare the tax-code result with the annual calculation after the tax year ends. Correct an incorrect code through HMRC or payroll, but do not assume a code change alters the underlying band or creates a new allowance. Keep the final calculation and supporting records for the relevant tax year.
Multiple jobs and changing income
When a person has two jobs, HMRC normally allocates the Personal Allowance and rate bands through tax codes, but the final liability is based on the total taxable income for the year. A second employer may therefore use a BR, D0 or another code while the employee's annual position is still determined by the combined pay. Check the year-to-date figures across both employments rather than deciding that one payslip shows the final rate.
Bonuses, commission, taxable benefits, savings interest, dividends and rental profit can move the total across a band after the tax code was issued. Keep a running estimate of adjusted net income and update it when a payment is confirmed. If income falls, a previous code can continue to withhold too much until HMRC receives the new information; if income rises, an apparently generous code can leave a balancing amount later. The code is a collection mechanism, not a personal tax assessment.
The tax-band result also depends on the type of income. Non-savings income generally uses the bands first, while savings and dividends have their own allowances and rates that interact with the remaining bands. A pension contribution or Gift Aid payment may change adjusted net income and extend the basic-rate band, but it does not erase the need to record the underlying income. Keep payslips, P60s, pension statements, Gift Aid evidence and investment statements together for the year.
If you move to or from Scotland, confirm the statutory Scottish taxpayer position for the year rather than choosing bands based on the employer's address or the location of a bank account. If the address or residence facts are complicated, use the GOV.UK guidance and keep the evidence used. The difference between a UK-wide table and the Scottish table is material, but it is only one part of the complete Income Tax calculation.
Frequently Asked Questions
What are the income tax bands for 2026/27?
At what income do I pay higher-rate tax?
What is the 60% tax trap?
Do savings and dividends use the same bands?
How do Scottish income tax bands differ?
How can I avoid crossing into the higher-rate band?
What is the effective tax rate on a £60,000 salary?
Do tax bands apply to my whole salary or only part of it?
Are UK income tax bands the same in Scotland?
Can pension contributions reduce the 60% tax-trap effect?
Check your band and take-home pay with the Salary Calculator, then read the 60% Tax Trap guide, the Scottish Income Tax guide and the National Insurance 2026/27 guide for the full picture.
Official sources
Related Guides
How UK Tax Is Calculated 2026/27 — PAYE, NI & Loans
How UK income tax, National Insurance and student loan repayments are calculated in 2026/27: allowances, bands, thresholds, codes and examples.
Inheritance Tax 2026/27 — Nil Rate Band, Residence NRB & 40% Rate
Inheritance Tax for 2026/27: the £325,000 nil rate band, £175,000 residence nil rate band, 40% rate, transferable allowances for couples and the £2m taper.
Capital Gains Tax 2026/27 | Rates, Allowance & Reliefs
Capital Gains Tax for 2026/27: the £3,000 annual exempt amount, 18%/24% rates, Business Asset Disposal Relief at 18%, and reporting deadlines.
Review notes and assumptions
Reviewed
2026-09-19
Assumptions
- The main table covers England, Wales and Northern Ireland; Scottish income tax is explained separately.