Compare your take-home pay in 2025/26 vs 2026/27 side by side — income tax, NI, student loan and dividend changes.
By Konstantin Iakovlev · Founder, Calks.uk
Last updated: · Verified against HMRC and GOV.UK 2026/27 rates
Rates verified: 28 September 2026
Quick Answer
For most rUK employees, take-home pay is unchanged in 2026/27, income tax and NI thresholds are frozen until April 2031, so inflation quietly raises your real tax burden ("fiscal drag"). The genuine April 2026 changes: Scottish starter/basic bands uprated, student loan thresholds up (Plan 2 → £29,385), dividend rates +2 points (10.75% / 35.75%), and the National Living Wage £12.21 → £12.71.
Take-home change in 2026/27 vs 2025/26
+£0.00
No change: rUK thresholds are frozen until April 2031
| 2025/26 | 2026/27 | Change | |
|---|---|---|---|
| Income Tax | -£5,486.00 | -£5,486.00 | — |
| National Insurance | -£2,194.40 | -£2,194.40 | — |
| Take-Home | £32,319.60 | £32,319.60 | — |
What actually changed in April 2026:
• rUK income tax and NI thresholds frozen until April 2031, so inflation quietly raises your real tax burden ("fiscal drag")
• Scottish starter and basic bands raised: £1,140 more taxed at 19% instead of 20% and £2,035 more at 20% instead of 21%, worth up to £31.75 a year
• Student loan thresholds up: Plan 1 → £26,900, Plan 2 → £29,385, Plan 4 → £33,795 (repayments fall slightly)
• Dividend tax +2pp: basic 10.75%, higher 35.75% (Budget 2025)
• National Living Wage £12.21 → £12.71/hour
Disclaimer
This calculator is for guidance only. It is not financial or tax advice: check anything you rely on against the official source or a qualified adviser. Rates and figures come from HMRC and GOV.UK and are reviewed for the 2026/27 tax year. Everything is calculated in your browser; nothing you enter is sent to our servers.
How It Works
Every April the tax year rolls over, and the headlines rarely match what happens to your payslip. This calculator runs your salary (and optional dividends) through the complete 2025/26 and 2026/27 rules side by side, covering income tax on either rUK or Scottish bands, employee National Insurance, student loan and dividend tax, and shows exactly where the difference comes from.
For employees in England, Wales and Northern Ireland the striking answer is usually that nothing changed. The Personal Allowance (£12,570), basic-rate limit (£50,270) and additional-rate threshold (£125,140) are all frozen until April 2031, and employee National Insurance stays at 8% and 2%. A freeze is not neutral. If your pay rises with inflation, a larger share of it falls into higher bands each year. Economists call this fiscal drag, and it is the largest stealth tax rise of the decade. The OBR expects the freeze, extended at Budget 2025, to pull millions of people into tax or into higher bands.
Scotland uprated its starter and basic bands for 2026/27, with the starter band now running to £16,537 and basic to £29,526. That saves up to £31.75 a year (about £2.65 a month): £1,140 more is taxed at 19% instead of 20% and £2,035 more at 20% instead of 21%. The higher-rate threshold north of the border stays frozen at £43,662, so that relief runs out quickly once you climb. Choose Scotland in the inputs and both years are worked on Scottish bands rather than rUK ones.
Student loan thresholds rose with RPI in April 2026. Plan 1 moved to £26,900, Plan 2 to £29,385 and Plan 4 to £33,795, which on its own puts up to £75.15 (Plan 1), £82.35 (Plan 2) or £94.50 (Plan 4) a year back in graduates' pockets. Plan 5 and Postgraduate thresholds remain frozen at £25,000 and £21,000, so anyone who started after 2023 gains nothing here. On a £40,000 salary with a Plan 2 loan the repayment falls from £1,037.70 to £955.35, a difference of £82.35, and because income tax (£5,486) and NI (£2,194.40) are identical in both years, that is the whole change in take-home pay.
Dividend tax went the other way. Budget 2025 added 2 percentage points from April 2026, taking the basic rate to 10.75% and the higher rate to 35.75%, while the £500 allowance is unchanged. Company directors on a salary-plus-dividends mix feel this directly. Someone drawing £30,000 in dividends pays £590 more than in 2025/26, 2 points on the £29,500 above the allowance, which is the kind of figure that changes how a small company splits pay between salary and distribution.
Two more April 2026 movements sit outside the payslip comparison. The National Living Wage rose from £12.21 to £12.71 an hour, and benefits, statutory payments and the State Pension were all uprated. Employer National Insurance was left alone at 15%, with the secondary threshold still at £5,000. Savers get no relief either, since the Personal Savings Allowance is frozen along with everything else, so a bigger interest bill in a higher-rate year simply produces a bigger tax bill on it.
Example: £40,000 salary, Plan 2 loan, England
- Income tax: identical both years, thresholds frozen (£5,486)
- National Insurance: identical both years (£2,194.40)
- Student loan 2025/26: (£40,000 − £28,470) × 9% = £1,037.70
- Student loan 2026/27: (£40,000 − £29,385) × 9% = £955.35
- Take-home difference: +£82.35/year, entirely from the Plan 2 threshold uprating
Frequently Asked Questions
- Why is my take-home pay the same in 2026/27 as last year?
- Because the rUK income tax thresholds are frozen. The Personal Allowance has been £12,570 and the higher-rate threshold £50,270 since April 2021, and both stay put until April 2031. Employee National Insurance (8% and 2%) and its thresholds are unchanged too. The freeze is a tax rise in disguise, known as fiscal drag: if your pay rises 4% with inflation but the tax-free and basic-rate bands do not move, a bigger slice of your income is taxed, and at higher rates. The OBR estimates the freeze, extended at Budget 2025, will pull millions of people into tax or into higher bands.
- What actually changed in April 2026?
- The genuine movers were these. Scottish starter and basic bands were uprated, starter now to £16,537 and basic to £29,526, slightly cutting Scottish bills. Student loan repayment thresholds rose with RPI, Plan 1 to £26,900, Plan 2 to £29,385 and Plan 4 to £33,795, reducing graduate repayments by up to £75.15, £82.35 and £94.50 a year respectively. Dividend tax rose 2 percentage points under Budget 2025, to 10.75% and 35.75%. The National Living Wage went from £12.21 to £12.71 an hour, and benefits, statutory pays and the State Pension were uprated. Employer NI stayed at 15% with the £5,000 secondary threshold.
- Who is worse off in 2026/27?
- Mainly people taking income as dividends. A company director drawing £30,000 in dividends pays £590 more tax than in 2025/26, because the 2-point rise to 10.75% and 35.75% applies to the £29,500 above the £500 allowance. Higher earners also lose more in real terms from the threshold freeze, since someone whose salary rose 5% into the £50,270 zone pays 40% on the increase where an uprated threshold would have spared part of it. Savers face the same frozen Personal Savings Allowance, and graduates on Plan 5 get no uprating either, theirs being frozen at £25,000 until 2027.
- Do Scottish taxpayers pay less income tax in 2026/27?
- A little, at most income levels. The starter band now runs to £16,537 and the basic band to £29,526, both uprated for 2026/27, which saves up to £31.75 a year, about £2.65 a month. The saving reaches that ceiling at £29,526 and grows no further, because the Scottish higher-rate threshold is frozen at £43,662. Choose Scotland in the calculator and both tax years are worked on Scottish bands, so the comparison reflects the Scottish position rather than the rUK one.