UK income tax runs on a tax year from 6 April to 5 April, and works through a Personal Allowance plus a series of bands. Here's how the pieces fit together.
The Personal Allowance
Everyone gets a tax-free Personal Allowance of £12,570 before any income tax is due. This isn't a deduction you claim — it's automatically built into your tax code. If you earn over £100,000, though, your allowance starts tapering away, reducing by £1 for every £2 earned above that threshold — and disappears entirely once income reaches £125,140.
The tax bands
| 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% |
Like most progressive systems, only the portion of income within each band is taxed at that band's rate — not your entire income at the highest rate you reach.
Income tax vs National Insurance
Income tax and National Insurance (NI) are calculated separately and both come out of your pay. NI funds specific state benefits (like the State Pension) and has its own thresholds and rates — it isn't just "extra income tax." See our National Insurance Calculator for a combined view.
Scotland has different rates
If you're a Scottish taxpayer, Scottish Income Tax uses different band thresholds and an extra "intermediate" band — set by the Scottish Parliament rather than Westminster. This guide covers rUK (England, Wales, Northern Ireland) rates.
See your exact take-home pay after tax and NI.
Use the UK Income Tax Calculator →How it's actually collected
For most employees, income tax is deducted automatically through PAYE (Pay As You Earn) before you're even paid — see our companion post, How PAYE Works, for the mechanics.
Figures reflect the 2025/26 tax year for rUK taxpayers. Scottish and Welsh rates can differ. Verify current thresholds with HMRC before making financial decisions.