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UK Salary & Tax Calculator 2025/26
Calculate your take-home pay after income tax, National Insurance, student loans, and pension contributions.
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How UK income tax works in 2025/26
Income tax in the UK is levied in bands above a tax-free personal allowance of £12,570. For most taxpayers in England and Wales, the first £12,570 of income is completely free of income tax. Earnings between £12,571 and £50,270 are taxed at the basic rate of 20%. Income between £50,271 and £125,140 falls into the higher-rate band, taxed at 40%. Any earnings above £125,140 attract the additional rate of 45%.
National Insurance Contributions (NICs) are calculated separately from income tax. As an employee, you pay Class 1 NICs at 8% on earnings between the Primary Threshold (£12,570 per year) and the Upper Earnings Limit (£50,270). Above £50,270, the employee NIC rate falls to just 2%. NICs fund the National Health Service, state pension entitlement, and certain benefits.
One of the most significant — and often overlooked — features of the UK tax system is what's commonly called the £100K trap. When your gross income exceeds £100,000, HMRC begins to withdraw your personal allowance at a rate of £1 for every £2 of income above that threshold. By the time your income reaches £125,140, your personal allowance has been entirely withdrawn. This creates an effective marginal tax rate of 60% on income in that band — meaning that for many people in this range, making additional pension contributions is not just tax-efficient but genuinely essential for preserving take-home pay.
Scotland operates its own income tax system, administered by Revenue Scotland. Scottish taxpayers benefit from a separate set of bands, currently with six rates ranging from a 19% starter rate to a 48% top rate. The differences become particularly significant for higher earners — a Scottish taxpayer earning £75,000 will pay considerably more in income tax than an equivalent earner in England, Wales, or Northern Ireland. National Insurance, however, remains a UK-wide tax set by Westminster and is the same regardless of where in the UK you live.
FAQ
Frequently asked questions
When do I start paying income tax?
You start paying income tax once your earnings exceed the personal allowance, which is £12,570 for the 2025/26 tax year. Income below this threshold is completely tax-free. If your income is between £100,000 and £125,140, your personal allowance is gradually withdrawn, creating an effective 60% marginal tax rate in that band.
What is the personal allowance for 2025/26?
The personal allowance for 2025/26 is £12,570. This has been frozen since 2021 and is scheduled to remain frozen until at least 2028. If your income exceeds £100,000, your personal allowance is reduced by £1 for every £2 of income above that threshold, reaching zero at £125,140.
How is National Insurance calculated?
Employees pay Class 1 National Insurance Contributions (NICs) at 8% on earnings between the Primary Threshold (£12,570 per year) and the Upper Earnings Limit (£50,270). Above £50,270, the rate drops to 2%. Your employer also pays Employer NICs at 15% on your earnings above £5,000 per year, though this doesn't affect your take-home pay directly.
What is the £100K personal allowance trap?
If your gross income exceeds £100,000, HMRC begins to withdraw your personal allowance. For every £2 of income above £100,000, you lose £1 of personal allowance. This creates an effective marginal tax rate of 60% on income between £100,000 and £125,140 — because you're paying 40% higher-rate income tax plus effectively losing the tax benefit of 20% of your allowance. Many people in this band choose to make additional pension contributions to reduce their adjusted income below £100,000.
How does Scottish income tax work?
Scotland has its own income tax rates set by the Scottish Parliament. For 2025/26, Scottish taxpayers pay a starter rate of 19% on income from £12,571 to £14,876, a basic rate of 20% up to £26,561, an intermediate rate of 21% up to £43,662, a higher rate of 42% up to £75,000, an advanced rate of 45% up to £125,140, and a top rate of 48% above that. National Insurance contributions remain the same for Scottish taxpayers.
Do pension contributions reduce my tax bill?
Yes. Pension contributions made through a salary sacrifice scheme reduce your gross salary for both income tax and National Insurance purposes. This means you save income tax at your marginal rate plus NICs on every pound you contribute. For a higher-rate taxpayer in England, this can mean an effective saving of 42p for every £1 contributed. Even outside salary sacrifice, personal pension contributions attract tax relief at your marginal rate.
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