Annual Tax Summary Calculator

Each year HMRC publishes an Annual Tax Summary showing how the income tax and National Insurance you paid were spent. It divides government spending into categories such as Health, Welfare, State Pensions, Education, Defence, Transport, Public Order and Safety, and interest on government debt, then applies those proportions to your own contributions. The summary usually arrives in January. For 2026/27 the biggest slice goes to Health at around 20%, followed by Welfare at around 19% and State Pensions at around 13%, drawn from published Treasury figures on departmental spending.

Working out what you paid in the first place is the other half of the job, since the total depends on where your income comes from. The Personal Allowance covers £12,570, then 20% applies to £50,270, 40% to £125,140 and 45% above. Class 1 National Insurance is nil to £12,570, 8% to £50,270 and 2% beyond. Dividends have their own £500 allowance and rates of 10.75%, 35.75% and 39.35%. Savings interest carries a Personal Savings Allowance of £1,000, £500 or nothing depending on your band, and capital gains have a £3,000 exemption with rates of 18% and 24% on all asset types. Scotland sets its own bands.

Deductions climb steadily up the income scale. An employee on £30,000 pays £3,486 in income tax and £1,394 in National Insurance, £4,880 in all, an effective rate of 16.3%. At £50,000 the split is £7,486 and £2,994, giving £10,480 or 21.0%. At £75,000 it becomes £17,432 and £3,511, so £20,943 or 27.9%. By £100,000 the figures are £27,432 and £4,011, a total of £31,443 or 31.4%, and at £150,000 they reach £53,703 and £5,011, or £58,714, which is 39.1% of gross. Most employees see deductions somewhere in the 18-25% range.

Effective rate and marginal rate answer different questions. The effective rate, total tax divided by total income, is the one for budgeting and for comparing job offers. The marginal rate, what the next pound costs, is the one for deciding whether to make a pension contribution, take salary sacrifice or accept overtime. A £100,000 earner has an effective rate near 31% but a marginal rate of 40%, and a £150,000 earner is on 39% effective against 45% marginal.

Several thresholds create rates far above the headline ones. Above £100,000 the Personal Allowance is withdrawn by £1 for every £2 of income, which produces a 60% marginal rate all the way to £125,140, where the allowance has gone entirely and the 45% additional rate takes over. The High Income Child Benefit Charge starts at £60,000 and only matters if you receive Child Benefit. At the other end, someone on Universal Credit loses 55% of their take-home pay to the taper after 20% tax and 8% NI, a marginal rate of about 68% on earnings in the £12-£50k range.

There are legitimate ways to bring the total down. Pension contributions attract relief at your marginal rate, so anywhere from 20% to 60%, with an annual limit of £60,000 plus 3-year carry-forward, and paying enough to drop back below £100,000 removes the taper altogether. Salary sacrifice arrangements for pensions, cycle-to-work and electric cars save National Insurance as well as income tax. Marriage Allowance is worth £252 a year where one partner pays no tax and the other is on the basic rate. Gift Aid lets the charity claim 25% and a higher-rate donor reclaim a further 25%. Junior ISAs shelter £9,000 a year for children, and EIS and SEIS investments carry 30% and 50% income tax relief, though the risk is high.