UK income tax bands determine how much of your salary goes to HMRC. The key concept: you don't pay the same rate on all your income. Different portions are taxed at different rates, from 0% on the first £12,579 up to 45% on earnings above £125,140. This guide explains exactly how each band works for the 26-27 tax year (6 April 2026 to 5 April 2027) for residents of England, Wales, and Northern Ireland, with an interactive explorer to visualise the bands at your salary level.
Key takeaways for 26-27:
- Personal Allowance: £12,579 tax-free (reduced if you earn over £100,000)
- Basic Rate: 20% on £12,579–£50,270
- Higher Rate: 40% on £50,270–£125,140
- Additional Rate: 45% above £125,140
How is my salary split across tax bands?
Use the slider below to see exactly how any salary is divided across the 26-27 income tax bands. The stacked bar shows how much of your income falls into each band, and the summary cards show your effective tax rate (average across all income) versus your marginal rate (the rate on your next £1 earned).
Annual salary: £45,000
How your £45,000 salary is split across tax bands
Effective rate
32.5%
(IT + NI combined)
Marginal rate
28%
(on next £1 earned)
Take-home
£45,359
/year
How do income tax bands actually work?
A common misconception is that moving into a higher band means all your income is taxed at the new rate. That is categorically wrong. You only pay the higher rate on the portion of your income that falls within that band. The tax system is like a stack of buckets — each bucket fills up before income spills into the next.
For 26-27, the UK income tax bands are:
| Band | Taxable Income | Tax Rate | Band Width |
|---|---|---|---|
| Personal Allowance | Up to £12,579 | 0% | £12,579 |
| Basic Rate | £12,579–£50,270 | 20% | £37,691 |
| Higher Rate | £50,270–£125,140 | 40% | £74,870 |
| Additional Rate | Above £125,140 | 45% | Unlimited |
How much tax do I pay on £60,000?
Let's work through a £60,000 salary step by step. Your income fills each band from the bottom up:
- First £12,579 (Personal Allowance): £0 tax. This portion is completely tax-free.
- Next £37,691 (£12,579–£50,270): Taxed at 20% = £7,538 income tax.
- Remaining £9,730 (£50,270–£60,000): Taxed at 40% = £3,892 income tax.
Total income tax: £11,430. Add National Insurance and your take-home is £45,359 per year (£3,780/month). Your effective tax rate (income tax + NI combined) is 24.4% — significantly less than the 40% headline rate of the band you're in, because most of your income is taxed at lower rates. See full £60K breakdown →
What is the Personal Allowance and how does it taper?
Everyone receives a Personal Allowance — £12,579 of income that's completely tax-free in 26-27. However, if your adjusted net income exceeds £100,000, the Personal Allowance reduces by £1 for every £2 you earn above that threshold. At £125,140, it reaches zero entirely.[1]
This taper creates a hidden marginal rate of 62% between £100,000 and £125,140: the standard 40% income tax + 2% NI + an effective extra 20% from losing £1 of allowance per £2 earned. Someone earning £105,000 pays more tax on their last £5,000 than someone earning £200,000 does on theirs.
What is the 60% tax trap?
The “60% tax trap” refers to the effective marginal rate of 62% that applies between £100,000 and £125,140. It's not an official HMRC term, but it's very real. Here's the maths: if you earn £5,000 above £100,000, you pay 40% income tax (£2,000),2% NI (£100), and you lose £2,500 of Personal Allowance which is then taxed at 20% = £500 extra tax. Total additional tax on that £5,000: approximately £2,600.
In practice, earning from £100,000 to £105,000 gives you only £1,900 extra take-home — that's £380 for every £1,000 earned. Many people in this zone use salary sacrifice into a pension to reduce their adjusted net income below £100,000, restoring their full Personal Allowance. See our £100K tax trap guide for strategies.
How does National Insurance relate to income tax bands?
Income tax and National Insurance are separate deductions with different thresholds. NI is charged at 8% on earnings between £12,579 and £50,270, and 2% above that.[2] NI is not affected by which income tax band you're in, and Scottish income tax rates don't change your NI liability.
When people talk about their “tax burden,” they usually mean income tax plus NI combined — which is why the combined marginal rate at basic rate is 28% (not just 20%), and at higher rate is 42% (not just 40%). The widget above shows effective rates including both income tax and NI.
What is the difference between effective and marginal tax rate?
Your effective rate is the total tax you pay as a percentage of your whole income. On £60,000, your effective rate (IT + NI) is 24.4%. Your marginal rate is the tax on your next pound earned. At £60,000, your marginal rate is 42% (40% IT + 2% NI) because any additional income falls in the higher rate band.
The distinction matters for financial planning. Your effective rate tells you how much of your salary goes to tax overall. Your marginal rate tells you how much of a raise you actually keep — and whether alternative compensation (pension contributions, benefits) might be more efficient. Use the explorer above to see both at any salary level.
Why are the bands frozen and what is fiscal drag?
The Personal Allowance and income tax band thresholds have been frozen since 2021/22 and are set to remain frozen through to 2027/28. This means that as wages rise with inflation, more people are pulled into higher tax bands — a process known as fiscal drag. In real terms, the £12,579 tax-free allowance is worth less each year than when it was set in 2021.
The practical impact: someone earning £48,000 in 2021 was a basic-rate taxpayer. If their salary has grown to £52,000 by 2026 (roughly keeping pace with inflation), they're now a higher-rate taxpayer on part of their income — even though their real purchasing power hasn't changed. The freeze effectively creates a stealth tax rise worth hundreds to thousands per year for middle-income earners. See our frozen thresholds guide for the full picture.
Are Scottish income tax bands different?
Yes. Scotland has its own income tax bands set by the Scottish Parliament, with more bands and different thresholds. Scottish taxpayers pay a starter rate, basic rate, intermediate rate, higher rate, advanced rate, and top rate. National Insurance rates remain the same across the UK — only income tax differs. For the full breakdown, see our Scottish income tax guide.
How can I reduce the tax I pay?
You can't change the bands, but you can use legitimate strategies to reduce how much of your income is taxed at higher rates:
- Pension contributions: Reduce your taxable income, potentially pulling you out of a higher band. Salary sacrifice also saves NI. See our pension tax relief guide.
- Gift Aid: Extends your basic rate band by the gross amount of your donation, potentially saving 20% on income that would otherwise be taxed at higher rate.
- Marriage Allowance: If one partner earns below £12,579 and the other is a basic rate taxpayer, transfer £1,258 of Personal Allowance to save up to £252/year.
- Salary sacrifice for benefits: Electric cars, bikes, and additional pension — all reduce your taxable pay before it reaches the tax bands.
For a complete list of strategies, see our how to reduce your tax bill guide. Use the income tax calculator to model the impact of pension contributions and other deductions at your specific salary level.
Sources
- HMRC — Income Tax rates and Personal Allowances. Rates for 26-27: Personal Allowance £12,579, basic rate 20% (£12,579–£50,270), higher rate 40% (£50,270–£125,140), additional rate 45% (above £125,140). Personal Allowance reduced by £1 for every £2 above £100,000. Accessed July 2026.
- HMRC — National Insurance rates and categories. Employee Class 1 category A: 8% between primary threshold and upper earnings limit (£12,579–£50,270), 2% above. Accessed July 2026.