2025/26 tax year · Income Tax + National Insurance
The UK personal allowance for 2025/26 is £12,570 — the amount you earn tax-free. Above this, income is taxed in bands. The Basic Rate of 20% applies to income between £12,571 and £50,270. The Higher Rate of 40% applies from £50,271 to £125,140. Income above £125,140 is taxed at the Additional Rate of 45%.
One important trap: if your income exceeds £100,000, the personal allowance is tapered away — reduced by £1 for every £2 over £100,000. This creates an effective marginal tax rate of 60% between £100,000 and £125,140, because you lose £1 of allowance (worth 40p in tax) for every £2 of income.
Employees pay Class 1 National Insurance contributions. The Primary Threshold (where NI starts) is £12,570 per year, matching the income tax personal allowance. The rate is 8% on earnings between £12,570 and £50,270, then 2% on everything above £50,270 (the Upper Earnings Limit).
Scottish residents pay Scottish Income Tax rates set by the Scottish Parliament, rather than UK rates. For 2025/26, Scotland has six bands: Starter Rate 19%, Basic Rate 20%, Intermediate Rate 21%, Higher Rate 42%, Advanced Rate 45%, and Top Rate 48%. National Insurance rates are the same across the UK — Scotland has no power to vary NI.
Workplace pension contributions made through salary sacrifice reduce your gross pay before income tax and National Insurance are calculated. This makes pension contributions highly tax-efficient. For example, a higher-rate taxpayer contributing £100 to their pension effectively costs only £60 after 40% tax relief.
Between £100,000 and £125,140, every extra £2 you earn costs £1.20 in income tax — 40% on the income itself, plus 40% on the personal allowance lost. This creates an effective 60% marginal rate. Pension contributions can help avoid this trap.
Most employees pay tax through PAYE (Pay As You Earn). Your employer deducts income tax and National Insurance from each payslip based on your tax code, which HMRC issues. Self-employed people file a Self Assessment tax return each year.
No. Student loan repayments depend on your loan plan and are deducted separately. Plan 1 repayments are 9% on income above £24,990. Plan 2 repayments are 9% above £27,295. The calculator shows tax and NI only.
Yes, the calculator uses the 2025/26 tax bands and rates as published by HMRC. It does not account for tax codes other than the standard 1257L, Marriage Allowance, Scottish tax credits, or income from savings and dividends.