UK tax bands 2026/27, explained
Three numbers decide most of your UK tax bill: the personal allowance, the higher-rate threshold, and the National Insurance thresholds. Here is how they fit together in 2026/27.
The personal allowance
The first £12,570 you earn is tax-free. This allowance has been frozen for years, which quietly raises taxes: as wages grow with inflation, a larger share of your pay becomes taxable ("fiscal drag"). Above £100,000 of income the allowance is withdrawn at £1 for every £2, and disappears completely at £125,140.
Income tax bands (England, Wales, Northern Ireland)
| Taxable income (after allowance) | Rate |
|---|---|
| Up to £37,700 | Basic rate, 20% |
| £37,701 to £125,140 | Higher rate, 40% |
| Over £125,140 | Additional rate, 45% |
Because the allowance sits underneath, you start paying 40% once your salary passes £50,270 (£12,570 + £37,700).
Scotland is different
Scotland sets its own bands for earned income: 19% starter, 20% basic, 21% intermediate, 42% higher (from £31,093 of taxable income), 45% advanced and a 48% top rate. Compared with the rest of the UK, a Scottish taxpayer takes home £35 more at £30,000, £65 less at £40,000 and £1,496 less at £50,000. National Insurance, however, is the same UK-wide.
National Insurance
Employees pay 8% on earnings between £12,570 and £50,270 and 2% above. NI is charged per pay period rather than annually, which matters for bonuses: a large one-off payment can attract less NI than the same amount spread across the year.
The 60% trap
Between £100,000 and £125,140 each extra pound loses 40p in tax plus 20p from the shrinking allowance plus 2p NI, an effective 62% marginal rate. Pension contributions by salary sacrifice are the standard way to step out of this zone. You can see the trap directly in the marginal-rate figure of our salary calculator, try £110,000.
What this means for take-home pay
A £35,000 salary keeps about 82% after tax and NI. At £60,000 it is roughly 76%; at £130,000 about 62%. Exact figures for any salary are on our per-salary pages, for example £35,000 after tax or £60,000 after tax.
Frequently asked questions
At what income does the UK personal allowance start to be withdrawn in 2026/27?
The personal allowance begins to taper away at £100,000, reducing by £1 for every £2 of income above that figure, and disappears completely at £125,140.
Why do bonuses sometimes attract less National Insurance than regular pay?
National Insurance is calculated per pay period rather than cumulatively. A large bonus paid in a single pay period may push part of it above the upper earnings limit, where only the 2% rate applies instead of 8%.
How do Scottish income tax rates differ from the rest of the UK in 2026/27?
Scotland uses six bands including a 42% higher rate and a 48% top rate. The higher rate threshold in Scotland is lower than the 40% band threshold in England, Wales and Northern Ireland, meaning Scottish taxpayers on mid-to-higher incomes typically pay more.
Sources: HMRC rates and thresholds for employers 2026/27. Last updated 2026-11-04.