Income Tax Calculator 2026-27

UK income tax is calculated on a progressive banding system. You are entitled to a tax-free Personal Allowance of £12,570 for the 2026/27 tax year, and income above that is taxed at increasing rates: 20% Basic Rate on £12,571 to £50,270, 40% Higher Rate on £50,271 to £125,140, and 45% Additional Rate above £125,140. Enter your gross annual salary and the exact banding structure used by HMRC is applied, showing the tax falling in each band, your employee National Insurance, your effective tax rate and your take-home pay after both tax and NI.

If you earn more than £100,000, your Personal Allowance is reduced by £1 for every £2 above this threshold and is eliminated completely at £125,140. That withdrawal creates an effective marginal rate of 60% on income between £100,000 and £125,140, or 62% once National Insurance is counted, which makes it the single biggest tax cliff in the UK system. The usual answer is a pension contribution large enough to bring income back below £100,000: a £10k contribution restores the full £12,570 allowance at a net cost of £3,800 to £4,000, against a saving of £6,200 or more. Charity Gift Aid and salary sacrifice for childcare, an EV or cycle-to-work work the same way.

Two different percentages get called your tax rate, and they answer different questions. The effective rate is total tax divided by total income, so an employee on £30,000 pays 16.3% once £4,880 of tax and National Insurance is counted, rising to 21.0% at £50,000, 27.9% at £75,000, 31.4% at £100,000 and 39.1% at £150,000. The marginal rate is what the next £1 costs, and counting employee NI it is 28% in the basic rate band, 42% above £50,270 (40% income tax plus 2% NI), 62% through the £100,000 to £125,140 taper zone, and 47% above £125,140. Use the marginal rate for pension decisions and the effective rate for budgets.

Your tax code tells the payroll how much allowance to hand over. 1257L is the standard 2026/27 code carrying the full £12,570. A K code such as K475 means taxable benefits have swallowed the allowance and turned it negative. BR charges basic rate on everything and often appears on a second job, 0T gives no Personal Allowance at all, for example when HMRC has no information about you or the allowance is used elsewhere, and NT means no tax at all. The emergency code is 1257L with a W1 or M1 suffix (or X), which works out tax on each pay period on its own rather than cumulatively. M and N mark the recipient and transferor of Marriage Allowance, an S prefix identifies a Scottish taxpayer and a C prefix a Welsh one. If the code looks wrong, call HMRC on 0300 200 3300 and expect the fix to take 1 to 2 weeks.

Marriage Allowance is worth £252 a year and goes unclaimed far more often than it should. The lower-earning spouse, with income under £12,570, transfers £1,260 of unused Personal Allowance to a higher-earning partner, and you apply at gov.uk/marriage-allowance. Claims can be backdated up to 4 years, so four missed years come to a £1,008 refund. The partner receiving the allowance must be a basic-rate taxpayer, with income between £12,571 and £50,270 (up to £43,662 in Scotland, the top of the intermediate band), so entitlement stops once the recipient moves into higher-rate tax.

Pension contributions attract relief at your marginal rate, so they save anywhere between 20% and 60% depending on where your income sits, with an Annual Allowance of £60,000 a year plus 3 years of carry-forward. Salary sacrifice into a pension, cycle-to-work or an EV saves income tax and National Insurance together, a combined 28% to 47% (62% in the taper zone). An ISA shelters £20,000 a year, a Junior ISA £9,000 per child, and a Lifetime ISA £4,000 a year with a 25% bonus for anyone under 40. Gift Aid lets the charity claim 25% and a higher-rate payer reclaim a further 25%, while EIS and SEIS carry their own reliefs for high-risk investing.

Scottish taxpayers should use the Scottish Income Tax Calculator instead, as Scotland has its own rates and bands. The Scottish Parliament sets six bands rather than three, with thresholds that differ significantly from the figures above, so putting a Scottish salary through this page will misstate the bill. Dividend income and capital gains are taxed at different rates again and sit outside what this tool works out.