UK Income Tax Rates and Bands 2025/26: What You Actually Pay
A plain-English overview of PAYE income tax, personal allowance taper, Class 1 employee National Insurance, and student loan repayments — aligned with the figures used in our free UK income tax calculator. Covers England, Wales, and Northern Ireland only for income tax bands. For general information only — not professional advice.
1. Who this guide is for
This article is aimed at employees and anyone trying to understand roughly how UK income tax and common PAYE deductions fit together for the 2025/26 tax year (6 April 2025 to 5 April 2026).
The income tax bands and rates below are the ones that apply to non-savings, non-dividend income for taxpayers in England, Wales, and Northern Ireland. They match the logic in our income tax calculator. If you live in Scotland and are a Scottish taxpayer, your income tax rates and bands on earnings can differ — see section 9.
Always verify your own position with gov.uk or a qualified accountant; payroll software, week 53, benefits in kind, and multiple jobs can all change your actual deductions.
2. Gross salary, taxable income, and take-home pay
Gross salary is what your employer pays before deductions. Take-home pay (often called net pay) is what reaches your bank account after income tax, National Insurance, pension contributions (depending on scheme), student loan deductions, and any other payroll items.
For income tax, what matters is your taxable income: broadly, your income after allowances and any reliefs that apply. In a simple PAYE picture with just a personal allowance, taxable income is often gross salary minus personal allowance (and can be further reduced by things like salary sacrifice pension — more in section 7).
People searching "how much tax on £X" usually want this whole picture — tax bands plus NI and student loans. That is exactly what you can model in the take-home pay calculator.
3. Personal allowance 2025/26
Most people can receive a personal allowance — an amount of income that is not subject to income tax. For 2025/26 the standard amount is £12,570.
If your adjusted net income goes above £100,000, the allowance is usually tapered: it falls by £1 for every £2 of income over £100,000. With the standard allowance, it is typically gone once income reaches £125,140. This is why the effective tax rate between £100k and £125k can feel very high — you are losing allowance as well as paying tax at higher rates.
Our calculator applies this taper when estimating personal allowance. For HMRC definitions and edge cases, start from Income Tax rates and allowances on gov.uk.
4. Income tax bands (England, Wales & NI)
Once your personal allowance has been used, your taxable income for the year is charged in slices called bands. For 2025/26 the widths and rates used in our calculator are:
| Band | Taxable income (after allowances) | Rate |
|---|---|---|
| Basic rate | £0 to £37,700 | 20% |
| Higher rate | £37,701 to £112,570 | 40% |
| Additional rate | Above £112,570 | 45% |
These band widths are applied to taxable income, not necessarily to your headline salary. If your personal allowance is lower than £12,570, you move into higher bands at a lower salary — which is why the calculator is more reliable than rules of thumb alone.
5. When higher (40%) and additional (45%) rates start
Search engines love the question "when do I pay 40% tax?". With the full standard personal allowance and no other adjustments, the arithmetic lines up like this:
- •Higher rate (40%) typically starts when total income exceeds £50,270 (£12,570 + £37,700).
- •Additional rate (45%) on taxable income above the higher-rate band typically corresponds to total income above £125,140 (£12,570 + £37,700 + £74,870).
See it on your figures
Enter your annual salary into our income tax calculator to see how much of your income falls in the basic, higher, and additional slices after allowances, plus NI and any student loan repayments.
6. Class 1 employee National Insurance 2025/26
National Insurance is separate from income tax. For many employees, Class 1 NI is calculated on earnings in payroll — our tool uses the same annual thresholds as a sensible simplification for comparison with salary.
For 2025/26, on the basis used in our calculator:
| Annual earnings (NI basis) | Employee Class 1 rate |
|---|---|
| Up to £12,570 | 0% |
| £12,571 to £50,270 | 8% |
| Above £50,270 | 2% on earnings above £50,270 |
Official employer thresholds for 2025/26 are published in HMRC's Rates and thresholds for employers 2025 to 2026. Your payslip may use weekly/monthly equivalents, so annual figures can differ slightly from HMRC's exact rounding.
7. Salary sacrifice pension (quick note)
If you pay into a pension through salary sacrifice, your employment income for tax and (typically) NI can be reduced before those deductions are calculated. That can keep you in a lower tax band or reduce NI compared with paying the same amount after tax.
Our calculator lets you enter an annual salary sacrifice pension amount to mirror that effect on tax, NI, and income-based student loan repayments.
8. Student loan repayments on PAYE
If you have a Plan 1, 2, 4, or 5 loan, you normally repay 9% of income above your plan's annual threshold. Postgraduate loans are usually 6% above a separate threshold. If you have both, both can apply.
The annual thresholds used in our 2025/26 calculator (for illustration) are:
| Loan | Threshold (year) | Rate |
|---|---|---|
| Plan 1 | £26,065 | 9% |
| Plan 2 | £28,470 | 9% |
| Plan 4 | £32,745 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate | £21,000 | 6% |
Payslips use HMRC tables; your annual total may not match a simple "9% × (income − threshold)" to the penny. Confirm your plan and rates on Repaying your student loan.
9. Scotland and other caveats
Scottish income tax uses different bands and rates for Scottish taxpayers. This article and our calculator use England, Wales, and Northern Ireland income tax only.
Other real-world factors — company benefits, multiple jobs, underpayments, pension relief at source, blind person's allowance, marriage allowance, and more — can all change your effective tax.
Use this guide as a map; use the calculator for what-if salary scenarios; use a professional for decisions.
10. Frequently asked questions
What is the personal allowance for 2025/26?
For 2025/26, the standard personal allowance is £12,570. You do not pay income tax on income covered by your personal allowance (subject to rules such as tapering above £100,000). Always confirm your position on gov.uk or with a qualified adviser.
What are the UK income tax bands for 2025/26?
For England, Wales, and Northern Ireland, after your personal allowance is applied, income tax is usually charged at 20% on the first £37,700 of taxable income (the basic rate band), 40% on the next £74,870 of taxable income (the higher rate band), and 45% on taxable income above that (additional rate). Scottish taxpayers use different income tax bands and rates set by the Scottish Parliament.
At what salary do you pay 40% tax in the UK in 2025/26?
With the full standard personal allowance of £12,570 and no other adjustments, you typically enter the higher rate (40%) band once your total income exceeds £50,270 a year. This is because £12,570 + £37,700 = £50,270. If your personal allowance is reduced (for example by taper above £100,000), the salary where 40% begins will be lower.
How does personal allowance tapering work above £100,000?
If your adjusted net income exceeds £100,000, your personal allowance is usually reduced by £1 for every £2 of income above £100,000. With the standard allowance, it is fully withdrawn by £125,140. In that taper range your marginal tax rate can be higher than the headline band rates alone suggest. Our income tax calculator includes this taper in its estimate.
What are Class 1 employee National Insurance rates for 2025/26?
For 2025/26, Class 1 employee National Insurance is generally 8% on earnings between the Primary Threshold (£12,570 a year on the same annual basis as our calculator) and the Upper Earnings Limit (£50,270 a year), and 2% on earnings above the Upper Earnings Limit. Different rules may apply depending on age and category — check gov.uk.
Does this guide apply to Scotland?
The income tax bands and rates described here apply to England, Wales, and Northern Ireland. Scotland sets its own income tax bands and rates for Scottish taxpayers. National Insurance and most student loan repayment rules are broadly UK-wide, but your income tax on non-savings, non-dividend income may differ if you are a Scottish taxpayer.
11. Important disclaimer
This article is for general information and educational purposes only. It does not constitute professional tax, legal, financial, or accounting advice. Figures reflect our understanding of common 2025/26 rules for PAYE-style examples and may not match your payslip or HMRC in all cases. Always consult a qualified adviser and check gov.uk before acting. We accept no liability for reliance on this content.
Official HMRC references
Work out your take-home pay
Try our free UK income tax calculator for 2025/26 — income tax, Class 1 employee NI, and student loans (illustration only).