Understanding the UK income tax bands is the foundation of managing your money well. Whether you're checking a payslip, planning a pay rise or working out a pension strategy, knowing how the bands work tells you exactly what each extra pound of income is really worth. Here's everything you need to know for the 2025/26 tax year.
The 2025/26 income tax bands at a glance
For England, Wales and Northern Ireland, there are four bands:
| Band | Taxable income | 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% |
The personal allowance — your tax-free slice
The personal allowance is the amount you can earn each year before paying any income tax at all. For 2025/26 it's £12,570. This has been frozen for several years, a policy known informally as "fiscal drag" — as wages rise with inflation but the allowance stays fixed, more people gradually pay more tax.
The basic rate (20%)
The largest band for most workers. Income between £12,571 and £50,270 is taxed at 20%. The vast majority of UK employees fall entirely within this band, meaning they pay a blended effective rate well below 20% once the tax-free personal allowance is taken into account.
The higher rate (40%)
Once your income passes £50,270, the portion above that threshold is taxed at 40%. Crossing into this band is a key financial moment — it doubles the tax rate on your additional earnings and triggers other consequences, such as the High Income Child Benefit Charge and reduced personal savings allowance.
The additional rate (45%)
The top band applies to income over £125,140. There's no personal allowance at this level — it has already tapered away entirely. This band affects a small percentage of taxpayers but represents a significant share of total income tax collected.
How Scotland's bands differ
Scotland sets its own income tax rates for earned income. For 2025/26, Scotland uses six bands rather than three:
| Band | Rate |
|---|---|
| Starter rate | 19% |
| Basic rate | 20% |
| Intermediate rate | 21% |
| Higher rate | 42% |
| Advanced rate | 45% |
| Top rate | 48% |
The practical effect is that lower earners in Scotland pay marginally less than their English counterparts, while middle and higher earners pay more.
A worked example
Imagine you earn £60,000 in England in 2025/26. Your tax is calculated in slices:
- First £12,570: taxed at 0% = £0
- £12,571 to £50,270 (£37,700): taxed at 20% = £7,540
- £50,271 to £60,000 (£9,730): taxed at 40% = £3,892
- Total income tax: £11,432
Notice that only the slice above £50,270 is taxed at 40% — not your whole salary. This is the most important principle to remember about UK income tax.
Why understanding bands matters
Knowing your bands helps you understand your marginal rate — the tax on your next pound of income. This is what really matters for decisions like whether to take on overtime, make a pension contribution, or accept a bonus. Our income tax calculator shows both your effective rate and your marginal rate, so you can see the full picture instantly.
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This article is for general information only and does not constitute financial, tax or legal advice. Tax rules and rates can change, and your personal circumstances affect how they apply to you. Always consult a qualified professional before making financial decisions. Figures are based on 2025/26 rates.