How We Calculate Tax
This page explains how every figure on income-tax-calculator.com is calculated and sourced. All rates and thresholds come from official HMRC and Scottish Government publications. Last reviewed: 6 April 2026 · 2026/27 rates.
If you spot a figure that looks wrong, please contact us and we will check it.
Income Tax (England, Wales and Northern Ireland)
We use the UK income tax bands and rates published by HMRC. The Personal Allowance is frozen at £12,570 for 2026/27.
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571–£50,270 | 20% |
| Higher Rate | £50,271–£125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Source: Income Tax rates and Personal Allowances — GOV.UK
Personal Allowance Taper
For adjusted net income above £100,000, the Personal Allowance reduces by £1 for every £2 over the threshold. It reaches zero at £125,140, creating an effective 60% marginal rate (62% including NI) between those two figures.
Source: Adjusted net income — GOV.UK
Scottish Income Tax
Scottish taxpayers pay rates set by the Scottish Parliament. National Insurance and savings/dividend taxes are not devolved.
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter Rate | £12,571–£16,537 | 19% |
| Basic Rate | £16,538–£29,526 | 20% |
| Intermediate Rate | £29,527–£43,662 | 21% |
| Higher Rate | £43,663–£75,000 | 42% |
| Advanced Rate | £75,001–£125,140 | 45% |
| Top Rate | Over £125,140 | 48% |
Source: Income Tax in Scotland — GOV.UK
National Insurance (Class 1 employee)
We use weekly Primary Threshold and Upper Earnings Limit values published by HMRC, annualised by multiplying by 52.
| Earnings | Rate |
|---|---|
| Up to £12,576 | 0% |
| £12,577–£50,268 | 8% |
| Over £50,268 | 2% |
Source: National Insurance rates and categories — GOV.UK
Student Loan Repayments
Repayments are calculated monthly on income above each plan's threshold. We support all five repayment plans.
| Plan | Who it applies to | 2026/27 Threshold | Rate |
|---|---|---|---|
| Plan 1 | Pre-2012 English/Welsh, all NI students | £26,900 | 9% |
| Plan 2 | English/Welsh students 2012–2023 | £29,385 | 9% |
| Plan 4 | Scottish undergraduate students | £33,795 | 9% |
| Plan 5 | English students from August 2023 | £25,000 | 9% |
| Postgraduate | Masters and doctoral loans | £21,000 | 6% |
Source: Repaying your student loan — GOV.UK
Pension Contributions
The calculator supports four pension contribution types. For salary sacrifice arrangements, the sacrifice amount is deducted from gross salary before income tax and NI are calculated, giving relief at your marginal rate. For personal pension schemes, we apply basic rate tax relief at source (multiply contribution by 1.25). Higher and additional rate relief must be claimed via Self Assessment.
Sources: Tax on your private pension — GOV.UK · Salary sacrifice and the effects on PAYE — GOV.UK
Assumptions
Unless you change the defaults, our calculator assumes: tax code 1257L (standard Personal Allowance); England, Wales or Northern Ireland residence; no benefits in kind; standard Class 1 NI category A; and salary paid evenly across the tax year. Mid-year salary changes and cumulative vs week-1 tax codes are not modelled.
Update Schedule
We review all rates and thresholds every April when the new tax year starts and at any point that HMRC publishes a mid-year change. The “Last reviewed” date at the top of this page is updated on each review.
This site provides general information only and is not regulated by the FCA. It does not constitute personalised financial, tax, or legal advice. For guidance specific to your circumstances, consult a qualified accountant or visit MoneyHelper.