UK Income Tax Rates and Bands 2025/26 Explained
The UK income tax rates and bands for 2025/26 decide how much of your salary you keep. This guide explains the personal allowance, the 20%, 40% and 45% bands, the £100k trap and how it all fits together — with worked examples.
Understanding the UK income tax rates and bands for 2025/26 is the single most useful thing you can do to make sense of your payslip. Once you know how the bands work, you can predict your take-home pay, spot when a pay rise pushes you into a higher band, and avoid nasty surprises like the £100,000 personal allowance trap. This guide breaks down every band for England, Wales and Northern Ireland, with worked examples at common salary levels.
If you just want the final number for your own salary, our UK Take-Home Pay Calculator does the full calculation instantly. But it pays to understand what's happening underneath.
The UK income tax rates for 2025/26
Income tax in England, Wales and Northern Ireland is charged in bands. Each band only applies to the slice of income that falls inside it — this is what "marginal" taxation means. For the 2025/26 tax year the bands are:
| Band | Taxable income | Tax rate |
|---|---|---|
| Personal allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
These thresholds have been frozen for several years — a policy often called "fiscal drag", because as wages rise with inflation, more people are dragged into higher bands even though the rates haven't changed.
Scotland sets its own income tax bands and rates, which differ from the rest of the UK. The figures in this guide apply to England, Wales and Northern Ireland.
The personal allowance — your tax-free slice
The personal allowance is the amount you can earn before paying any income tax at all. For 2025/26 it's £12,570. Only income above this is taxed, and only at the rate for the band it falls into.
There's a major catch for higher earners. Once your income passes £100,000, your personal allowance shrinks by £1 for every £2 you earn above that. By £125,140 it has vanished entirely. This creates an effective 60% marginal tax rate on income between £100,000 and £125,140 — you pay 40% tax on the money plus lose allowance that gets taxed too. This is the infamous "£100k trap".
Worked example: tax on a £40,000 salary
Let's calculate the income tax on a £40,000 salary step by step:
- First £12,570 — personal allowance — taxed at 0% = £0
- Remaining £27,430 (from £12,571 to £40,000) falls in the basic rate band, taxed at 20% = £5,486
So the income tax on £40,000 is £5,486. Note this is only income tax — National Insurance is separate, which we cover in our guide to what National Insurance is and how it's calculated.
Worked example: tax on a £60,000 salary
A £60,000 salary crosses into the higher-rate band, so it's taxed in two slices:
- Personal allowance (£12,570) at 0% = £0
- Basic rate: £12,571 to £50,270 = £37,700 at 20% = £7,540
- Higher rate: £50,271 to £60,000 = £9,730 at 40% = £3,892
Total income tax = £11,432. Only the slice above £50,270 is taxed at 40% — a common misconception is that crossing into the higher band taxes your whole salary at 40%, which is not true.
How tax is collected: PAYE and your tax code
If you're employed, income tax is collected through PAYE (Pay As You Earn). Your employer works out the tax each payday using your tax code — usually 1257L for someone with the standard personal allowance. The tax code tells your employer how much tax-free pay you're entitled to. If your code is wrong, you can overpay or underpay tax, so it's worth checking it on your payslip.
Reducing your income tax legally
There are legitimate ways to reduce your taxable income:
- Pension contributions — money paid into a workplace or personal pension usually comes out before tax, lowering your taxable income.
- Gift Aid donations — extend your basic rate band if you're a higher-rate taxpayer.
- Salary sacrifice — swapping salary for benefits like extra pension or an electric car can cut both tax and National Insurance.
For a full picture of how these deductions change your net pay, read our guide on how to calculate your UK take-home pay.
Frequently asked questions
What are the UK income tax bands for 2025/26?
For England, Wales and Northern Ireland: 0% on income up to £12,570 (personal allowance), 20% from £12,571 to £50,270, 40% from £50,271 to £125,140, and 45% above £125,140.
How much can I earn before paying tax in the UK?
You can earn up to £12,570 in 2025/26 before paying any income tax, thanks to the personal allowance. This reduces if you earn over £100,000.
Does crossing into the 40% band tax all my income at 40%?
No. Only the portion of your income above £50,270 is taxed at 40%. Everything below is still taxed at 0% and 20% in the usual way. This is called marginal taxation.
Why is there a 60% tax rate between £100,000 and £125,140?
Because your personal allowance is withdrawn by £1 for every £2 earned over £100,000. Losing that tax-free allowance, combined with the 40% rate, produces an effective marginal rate of about 60% in that band.
Are the tax bands different in Scotland?
Yes. Scotland has its own set of income tax bands and rates with more bands than the rest of the UK. This guide covers England, Wales and Northern Ireland only.
This article was last reviewed for the 2025/26 tax year. Figures are for guidance only — always verify with HMRC or a qualified accountant.