How UK Income Tax is worked out
Income Tax is charged in slices, not at one flat rate, and only the income inside a band is charged at that band's rate. This calculator applies the 2026/27 bands for either England, Wales and Northern Ireland or Scotland.
Figures stated for the 2026/27 UK tax year. Content last checked against official sources on .
What this calculator does
- Works out the Income Tax due on a given income for the 2026/27 tax year.
- Applies either the three England, Wales and Northern Ireland bands or the six Scottish bands.
- Handles the withdrawal of the Personal Allowance above £100,000, which creates the 60% effective marginal band.
- Converts the annual figure into monthly, weekly and hourly equivalents.
- Does not include National Insurance, pension deductions or student loan repayments — those are separate charges with their own calculators.
How the calculation works
The engine starts from gross income for the year and subtracts the Personal Allowance to give taxable income. For 2026/27 the Personal Allowance is £12,570, but it is withdrawn once adjusted net income passes £100,000: every £2 above that threshold removes £1 of allowance, so the allowance reaches zero at £125,140. Taxable income is then cut into statutory slices and each slice is charged at its own rate. In England, Wales and Northern Ireland there are three: 20% on the first £37,700 of taxable income, 40% up to £125,140, and 45% above. Scotland applies six, running from a 19% starter rate to a 48% top rate. Only the income falling inside a band is charged at that band's rate — moving into the higher rate never re-taxes the income below it. That single point is the most common misunderstanding about UK Income Tax, and it is why a pay rise across a threshold always leaves you better off in absolute terms.
The rule
Taxable income = gross income − Personal Allowance (withdrawn above £100,000). Income Tax = the sum, across bands, of (income falling in that band × that band's rate).
Step by step
- Take gross annual income, converting from the frequency you entered if needed.
- Reduce the £12,570 Personal Allowance by £1 for every £2 of income above £100,000.
- Subtract the resulting allowance from gross income to give taxable income.
- Split taxable income across the statutory bands for your jurisdiction.
- Charge each slice at its own rate and add the results together.
Worked example
Priya earns £55,000 a year in Manchester and wants to know her Income Tax, and how it would differ if she moved to Glasgow.
What was entered
| Income | £55,000 |
|---|---|
| Income frequency | Annual |
| Jurisdiction | England/Wales/NI |
The arithmetic
- £55,000 is well below the £100,000 taper, so the full £12,570 Personal Allowance applies.
- Taxable income is £55,000 − £12,570 = £42,430.
- The first £37,700 of that is charged at the 20% basic rate: £7,540.
- The remaining £4,730 falls into the higher rate at 40%: £1,892.
- Total Income Tax is £7,540 + £1,892 = £9,432, or £786 a month.
- A Scottish taxpayer on the same £55,000 would pay £11,082.05, because the same £42,430 is spread across six bands reaching 42% rather than three reaching 40%.
What the calculator returns
| Personal Allowance | £12,570.00 |
|---|---|
| Taxable income | £42,430.00 |
| Income Tax for the year | £9,432.00 |
| Income Tax per month | £786.00 |
Key assumptions
- The 2026/27 rates are assumed to apply for the whole tax year.
- The standard Personal Allowance applies. Marriage Allowance transfers and blind person's allowance are not modelled.
- Income is treated as non-savings, non-dividend income; dividends and savings interest have their own rates and allowances.
- Scottish rates are applied on the basis that you are a Scottish taxpayer for the whole year.
Limitations
- This is an annual estimate. Real payroll operates cumulative PAYE period by period, so a payslip can differ because of rounding, a mid-year code change, a bonus, or earlier earnings in the year.
- K codes and Week 1 / Month 1 markers are outside the annual model and are not supported.
- Scottish taxpayer status is determined by where your main residence is, not where you work, and the calculator takes your selection at face value.
- Benefits in kind, taxable state benefits and income taxed at source are not included.
Common questions
If I move into the 40% band, is all my income taxed at 40%?
Why is there an effective 60% tax rate around £100,000?
Does this include National Insurance?
Am I a Scottish taxpayer if I commute into Scotland for work?
Related calculators
- Take-Home Pay Calculator — See Income Tax alongside National Insurance, pension and student loan for an actual take-home figure.
- National Insurance Calculator — National Insurance is a separate charge with its own thresholds and its own shape.
- UK Salary Calculator — Convert the same pay between yearly, monthly, weekly and hourly.
- Salary Sacrifice Calculator — Salary sacrifice reduces the income taxed here, and is the usual route out of the 60% band.
Official sources
Every figure in this guide was checked against the sources below. Where a source could not confirm a figure, it is marked as requiring verification rather than presented as settled.
- Income Tax rates and Personal Allowances — GOV.UK (6 April 2026 to 5 April 2027)Personal Allowance £12,570; basic 20% to £50,270; higher 40% to £125,140; additional 45% above; taper from £100,000
- Income Tax in Scotland — GOV.UK (2026 to 2027)Scottish bands: starter 19%, basic 20%, intermediate 21%, higher 42%, advanced 45%, top 48%
- Income over £100,000 — GOV.UKPersonal Allowance reduced by £1 for every £2 of adjusted net income above £100,000
- Income Tax Act 2007 — legislation.gov.ukStatutory basis for the Income Tax charge, rates and allowances