UK Income Tax & NI Calculator
Last updated: 5 July 2026
Reviewed by Gavin Meiring, Lead research and primary author · Doctoral Candidate (Corporate Governance) · Research and drafting assisted by AI
- UK income tax began in 1799 as a temporary wartime levy introduced by William Pitt the Younger to help pay for the Napoleonic Wars.
- The tax year still ends on 5 April because of Britain's switch to the Gregorian calendar in 1752, when the old year-end was shifted by 11 days.
- Pay As You Earn (PAYE), which deducts tax from wages before they reach the worker, was introduced in 1944 — a wartime innovation designed by civil servant Paul Chambers.
UK Income Tax Calculator
A UK income tax calculator works out the income tax and National Insurance contributions due on employment income, self-employment profits, or other taxable income, based on the current UK tax rates and thresholds. It is used by employees checking their take-home pay, self-employed individuals estimating their tax bill, and anyone planning a salary change or pay rise.
How to Use the UK Income Tax Calculator
- Enter your gross annual income (salary, self-employment profit, or other taxable income).
- Select whether you are employed (PAYE) or self-employed.
- Enter any pension contributions, Gift Aid donations, or other allowable deductions if applicable.
- Click calculate to see your income tax, National Insurance, total deductions, and net take-home pay.
The Formula
UK income tax is calculated on the amount above the Personal Allowance, applied in bands:
Tax = (Income in each band) x (Band rate)
For 2024/25:
- Personal Allowance: £12,570 (0% tax)
- Basic rate: £12,571 to £50,270 (20%)
- Higher rate: £50,271 to £125,140 (40%)
- Additional rate: above £125,140 (45%)
The Personal Allowance is reduced by £1 for every £2 of income above £100,000, reaching zero at £125,140.
National Insurance (Class 1 for employees in 2024/25):
- 8% on earnings between £12,570 and £50,270
- 2% on earnings above £50,270
Real-World Example
Gross salary: £55,000. No pension contributions.
Income tax:
- Personal Allowance: £12,570 (no tax)
- Basic rate band: (£50,270 - £12,570) x 20% = £37,700 x 20% = £7,540
- Higher rate band: (£55,000 - £50,270) x 40% = £4,730 x 40% = £1,892
- Total income tax: £9,432
National Insurance:
- 8% band: (£50,270 - £12,570) x 8% = £37,700 x 8% = £3,016
- 2% band: (£55,000 - £50,270) x 2% = £4,730 x 2% = £95
- Total NI: £3,111
Total deductions: £12,543. Net take-home: £42,457 (approximately £3,538 per month).
The 60% Tax Trap
There is an effective marginal rate of 60% on income between £100,000 and £125,140. In this range, each additional £2 of income costs £1 in income tax (40%) plus removes £1 of Personal Allowance, creating an additional 20% tax on the income that was previously covered by the allowance. Combined with National Insurance at 2%, the effective rate on income in this band exceeds 62%. Individuals whose income falls in this range can reduce it by making pension contributions or Gift Aid donations, which restore the Personal Allowance. For example, a £10,000 employer pension contribution from someone earning £110,000 reduces effective taxable income to £100,000 and restores £5,000 of Personal Allowance.
Frequently Asked Questions
What is the Marriage Allowance and who can claim it? The Marriage Allowance allows a spouse or civil partner to transfer up to £1,260 of their unused Personal Allowance to their partner, reducing the partner's tax bill by up to £252 per year. It is available where one partner earns below the Personal Allowance (£12,570) and the other is a basic rate taxpayer. It cannot be claimed if either partner pays higher or additional rate tax.
How does self-employment affect my tax? Self-employed individuals pay income tax on profits at the same rates as employees, but instead of Class 1 NI they pay Class 4 NI (currently 6% on profits between £12,570 and £50,270, and 2% above). They also pay Class 2 NI at a flat rate if profits exceed the Small Profits Threshold. Self-employed people make payments on account in January and July each year, based on the prior year's tax bill.
Can pension contributions reduce my income tax? Yes. Personal pension contributions receive tax relief at your marginal rate, effectively reducing your taxable income. A higher-rate taxpayer contributing £8,000 net to a pension receives basic rate relief at source (the pension provider adds 20%, making it £10,000 in the fund) and claims a further 20% through their tax return, making the effective cost just £6,000. Pension contributions can also reduce income below the £100,000 threshold to avoid the 60% effective rate.
What is the tax-free trading allowance? The trading allowance is £1,000 per tax year. If your gross trading or self-employment income is below £1,000, you do not need to report it to HMRC or pay tax on it. If it is above £1,000, you can either deduct the £1,000 allowance from gross income (instead of actual expenses) or deduct actual allowable expenses, whichever gives a lower taxable profit.
Net pay across the 2024/25 bands
One salary figure says very little about the shape of the tax system, so the table below runs nine salaries through the bands by the published method and by this calculator's method side by side. The published column charges income tax on gross income less the Personal Allowance, in a 20 per cent band, then 40 per cent, then 45 per cent. The calculator's column charges 20 per cent on the slice between the allowance and £50,270 of income, then 40 per cent above that. National Insurance is identical in both, because it is charged on earnings before the allowance in each method.
| Gross income | Personal Allowance | Income tax (published) | Employee NI | Net pay | Monthly net pay | Deductions as a share of gross | Income tax (this calculator) |
|---|---|---|---|---|---|---|---|
| £12,570 | £12,570 | £0.00 | £0.00 | £12,570.00 | £1,047.50 | 0.00% | £0.00 |
| £20,000 | £12,570 | £1,486.00 | £594.40 | £17,919.60 | £1,493.30 | 10.40% | £1,486.00 |
| £30,000 | £12,570 | £3,486.00 | £1,394.40 | £25,119.60 | £2,093.30 | 16.27% | £3,486.00 |
| £50,270 | £12,570 | £7,540.00 | £3,016.00 | £39,714.00 | £3,309.50 | 21.00% | £7,540.00 |
| £60,000 | £12,570 | £11,432.00 | £3,210.60 | £45,357.40 | £3,779.78 | 24.40% | £11,432.00 |
| £100,000 | £12,570 | £27,432.00 | £4,010.60 | £68,557.40 | £5,713.12 | 31.44% | £27,432.00 |
| £110,000 | £7,570 | £33,432.00 | £4,210.60 | £72,357.40 | £6,029.78 | 34.22% | £32,432.00 |
| £125,140 | £0 | £42,516.00 | £4,513.40 | £78,110.60 | £6,509.22 | 37.58% | £40,002.00 |
| £150,000 | £0 | £53,703.00 | £5,010.60 | £91,286.40 | £7,607.20 | 39.14% | £51,189.00 |
To £100,000 the two columns agree to the penny. Above it they part, and the gap is the taper. The allowance falls by £1 for every £2 of income above £100,000, so the calculator's 20 per cent band keeps a fixed top of £50,270 while the published band top moves down with the allowance. At £110,000 the calculator charges £32,432 where the published figure is £33,432, a shortfall of £1,000. Once the allowance is exhausted at £125,140 the shortfall settles at £2,514, which is 20 per cent of the £12,570 allowance. The general form of the difference is 0.20 multiplied by (12,570 minus the reduced allowance).
The 62 per cent taper zone
An extra pound of income between £100,000 and £125,140 costs more than the headline 40 per cent suggests. The pound itself is taxed at 40 per cent, which is 40p. It also withdraws 50p of Personal Allowance, and that 50p is taxed at 40 per cent as well, which is another 20p. Add 2 per cent Class 1 National Insurance on the pound and the total is 62p. The same arithmetic on £1,000 of extra income gives £600 of income tax and £20 of National Insurance, so £620 in total.
That is a marginal rate of 62 per cent, not a rate above it. The calculator's own method returns 52 per cent on the same £1,000, because the withdrawn allowance is charged at 20 per cent instead of 40 per cent inside its band structure.
The taper zone rewards a pension contribution with unusual force. Somebody on £110,000 who pays £10,000 into a pension drops to £100,000 for tax purposes, and the allowance returns from £7,570 to the full £12,570, which is £5,000 of allowance back. Income tax falls from £33,432 to £27,432, a saving of £6,000 on £10,000, or 60 per cent relief. The calculator subtracts the pension figure from income before National Insurance as well, which matches salary sacrifice and does not match a personal contribution paid from already-taxed pay.
What the calculator models
The calculation behind the page assumes a few things worth stating plainly. The bands and thresholds are the 2024/25 set, hard-coded into the component rather than fetched. Income is a single annual figure, so two part-time jobs or a mid-year pay rise are averaged into one number and the bands are not apportioned across the year. The pension field is treated as an allowable deduction from income before both taxes, which is the salary sacrifice case. The result is annual, and the monthly figure is the annual net divided by twelve.
Four things the component does not charge are worth naming, because a reader comparing against a payslip will otherwise think the tool is wrong. Class 2 National Insurance for the self-employed is not included. Student loan repayments are not included. Marriage Allowance is not applied. The trading allowance described in the questions above is not applied, so a small self-employed profit is taxed from the first pound of the profit entered. The employment switch changes the National Insurance rate between Class 1 at 8 per cent and Class 4 at 6 per cent on the same band, which is the difference between £3,210.60 and £2,456.60 of contributions at £60,000.
Where the rates come from
The rates, thresholds and the taper rule used in the table are the ones HMRC publishes for the 2024/25 tax year: the £12,570 Personal Allowance, the £50,270 higher-rate threshold, the £125,140 additional-rate threshold, and the £1 for every £2 reduction above £100,000. The National Insurance bands, 8 per cent on earnings between £12,570 and £50,270 and 2 per cent above, come from the same published set. Read the pound amounts in this table as a 2024/25 reference and check the current year's figures before relying on the numbers for a live decision.
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