Income Tax and National Insurance 2026/27: Rates, Bands and What You Take Home
The 2026/27 tax year runs from 6 April 2026 to 5 April 2027. The tax-free personal allowance is still £12,570, the basic rate is 20% and employees pay 8% National Insurance on earnings between £12,570 and £50,270. Here is everything you need to know about income tax and NI this year, with worked examples.
By the CalcReckon team · 9 November 2026 · 8 min read
Key figures at a glance
| Allowance or rate | 2026/27 |
|---|---|
| Personal allowance | £12,570 |
| Basic rate (20%) | £12,571 – £50,270 |
| Higher rate (40%) | £50,271 – £125,140 |
| Additional rate (45%) | Over £125,140 |
| Employee National Insurance | 8% (£12,570 – £50,270), 2% above |
| Employer National Insurance | 15% above £5,000 |
| Dividend allowance | £500 |
| Capital Gains Tax annual exempt amount | £3,000 |
| ISA allowance | £20,000 |
The personal allowance and the income tax and National Insurance thresholds are frozen until April 2031, after the Autumn Budget 2025 extended the freeze by three years. As wages rise, more of your pay falls into the higher bands. This is often called fiscal drag.
Income tax bands in England, Wales and Northern Ireland
| Band | Taxable income | Rate |
|---|---|---|
| Personal allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Tax is charged in slices: only the part of your income inside each band is taxed at that band’s rate. Earning £1 over £50,270 does not make your whole salary taxable at 40%, only that £1.
Scottish income tax bands 2026/27
If you live in Scotland, Scottish rates apply to your earnings, pensions and rental income. Savings and dividends are taxed at the UK rates wherever you live.
| Scottish band | Income | Rate |
|---|---|---|
| Starter | £12,571 – £16,537 | 19% |
| Basic | £16,538 – £29,526 | 20% |
| Intermediate | £29,527 – £43,662 | 21% |
| Higher | £43,663 – £75,000 | 42% |
| Advanced | £75,001 – £125,140 | 45% |
| Top | Over £125,140 | 48% |
Scottish taxpayers still pay National Insurance at the UK thresholds, so someone earning between £43,663 and £50,270 pays 42% tax plus 8% NI on that slice.
The £100,000 trap: an effective 60% rate
Your personal allowance falls by £1 for every £2 of income over £100,000, so it disappears completely at £125,140. In that range, each extra £100 you earn costs £40 in higher-rate tax plus £20 from the lost allowance (£50 × 40%). That is an effective tax rate of 60%, plus 2% National Insurance.
For example, a pay rise from £100,000 to £110,000 adds £6,000 in income tax and £200 in NI, so you keep only £3,800 of the extra £10,000. Pension contributions, through salary sacrifice or claimed back through self assessment, reduce your adjusted net income and can bring back the allowance. Our bonus tax and salary sacrifice show the effect.
National Insurance 2026/27
| Who pays | Threshold | Rate |
|---|---|---|
| Employees (Class 1) | £12,570 – £50,270 a year | 8% |
| Employees (Class 1) | Over £50,270 | 2% |
| Employers (Class 1) | Over £5,000 a year per employee | 15% |
| Self-employed (Class 4) | £12,570 – £50,270 of profit | 6% |
| Self-employed (Class 4) | Over £50,270 | 2% |
Employees work out NI on each pay period, not on the year as a whole, so a one-off bonus can mean more NI in that month. Most employers can claim the Employment Allowance of £10,500 off their employer NI bill. If you are self-employed, see the self-employed tax for tax and NI on your profits.
How much will I take home? Worked examples
These figures are for an employee in England with a 1257L tax code, no pension contributions and no student loan:
| Salary | Income tax | National Insurance | Take-home a year | Take-home a month |
|---|---|---|---|---|
| £25,000 | £2,486 | £994 | £21,520 | £1,793 |
| £30,000 | £3,486 | £1,394 | £25,120 | £2,093 |
| £35,000 | £4,486 | £1,794 | £28,720 | £2,393 |
| £50,000 | £7,486 | £2,994 | £39,520 | £3,293 |
| £60,000 | £11,432 | £3,211 | £45,357 | £3,780 |
| £100,000 | £27,432 | £4,011 | £68,557 | £5,713 |
| £150,000 | £53,703 | £5,011 | £91,286 | £7,607 |
Your own figure will differ if you pay into a pension, repay a student loan, live in Scotland or have a different tax code. Use the take-home pay for your exact numbers, or the net to gross calculator if you know the take-home pay you need.
Student loan repayment thresholds
| Plan | 2026/27 threshold | Rate on income above |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 (Scotland) | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate loan | £21,000 | 6% |
Dividends, savings and capital gains
- Dividends: the first £500 is tax-free. Above that, dividend tax rose by 2 percentage points from April 2026 to 10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate). See the dividend tax.
- Savings interest: the personal savings allowance is £1,000 for basic-rate taxpayers, £500 for higher-rate and nil for additional-rate. The £5,000 starting rate for savings applies if your other income is under £17,570. Interest inside an ISA is tax-free (ISA calculator).
- Capital gains: the annual exempt amount is £3,000, and gains above it are taxed at 18% or 24% depending on your income (capital gains tax).
What changes in April 2027
The Autumn Budget 2025 announced further changes from 6 April 2027:
- Tax on savings interest rises by 2 points to 22%, 42% and 47%.
- Rental income gets its own property rates of 22%, 42% and 47% in England, Wales and Northern Ireland, and mortgage interest relief rises to 22%.
- Your personal allowance will be set against earnings and pensions first, before savings, property and dividend income.
Landlords can compare this year with next using the rental income tax.
How to check you are paying the right tax
- Check your tax code on your payslip or in the HMRC app. The standard code is 1257L; an emergency code such as 1257L W1 or M1 can mean you overpay. The tax code checker explains what yours means.
- If you started work part way through the year, changed jobs or left the UK, you may be due a refund.
- Pension contributions and Gift Aid donations can extend your basic-rate band. Higher-rate taxpayers have to claim the extra relief.
Frequently asked questions
What is the personal allowance for 2026/27?
The personal allowance is £12,570 for 2026/27. It is frozen at this level until April 2031 and is reduced by £1 for every £2 of income over £100,000.
When does the 40% tax rate start in 2026/27?
In England, Wales and Northern Ireland the higher rate of 40% applies to income between £50,271 and £125,140. In Scotland the 42% higher rate starts at £43,663.
How much is National Insurance in 2026/27?
Employees pay 8% on earnings between £12,570 and £50,270 a year and 2% above that. Employers pay 15% on earnings above £5,000 a year.
How much tax do I pay on £30,000 in 2026/27?
An employee in England earning £30,000 pays £3,486 income tax and £1,394 National Insurance, leaving about £25,120 a year or £2,093 a month, before any pension or student loan.
Have the tax bands changed for 2026/27?
No. The income tax bands and the personal allowance are the same as in 2025/26 and are frozen until April 2031. The dividend tax rates did rise by 2 percentage points from April 2026.
Sources
- GOV.UK – Income Tax rates and Personal Allowances
- GOV.UK – Budget 2025 rates and allowances
- Scottish Government – Scottish income tax 2026 to 2027
- GOV.UK – National Insurance rates and categories
- GOV.UK – Repaying your student loan
This article explains the general rules for the 2026/27 tax year. It is not personal tax advice; check your own situation with HMRC or a qualified adviser.