Everything you need to know about UK income tax bands, personal allowances, and how your salary translates to take-home pay in the 2025/26 tax year.
This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax rules and thresholds are subject to change. Always consult a qualified adviser for guidance specific to your circumstances.
Income tax is the tax you pay on your earnings above a certain threshold. In the UK, most employees pay income tax through PAYE (Pay As You Earn), meaning your employer deducts it before you receive your salary.
Understanding your tax position is crucial when evaluating job offers — a £5,000 salary increase doesn't mean £5,000 more in your pocket.
For the 2025/26 tax year, the personal allowance is £12,570. This is the amount you can earn before paying any income tax.
If your income exceeds £100,000, your personal allowance is reduced by £1 for every £2 you earn over £100,000. Above £125,140, you have no personal allowance at all.
| Band | 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% |
If you live in Scotland, different rates apply:
| Band | Income | Rate |
|---|---|---|
| Starter Rate | £12,571 – £15,397 | 19% |
| Basic Rate | £15,398 – £27,491 | 20% |
| Intermediate Rate | £27,492 – £43,662 | 21% |
| Higher Rate | £43,663 – £75,000 | 42% |
| Advanced Rate | £75,001 – £125,140 | 45% |
| Top Rate | Over £125,140 | 48% |
On top of income tax, you'll pay National Insurance (NI):
NI is separate from income tax and calculated differently — it doesn't benefit from the personal allowance in the same way.
Say you're offered a £60,000 salary:
Personal allowance: £12,570 at 0% = £0 tax
Basic rate band: £37,700 at 20% = £7,540
Higher rate: £9,730 at 40% = £3,892
Total income tax: £11,432
NI (8%): £37,700 × 8% = £3,016
NI (2%): £9,730 × 2% = £195
Total NI: £3,211
Take-home pay: £60,000 − £11,432 − £3,211 = £45,357 (~£3,780/month)
If you have a student loan, repayments are also deducted via PAYE:
Making pension contributions reduces your taxable income, which is a powerful way to increase your effective take-home pay. A salary sacrifice pension scheme is particularly efficient because you also save on National Insurance.
Comparing job offers with different salaries, pension contributions, and student loan plans is complex. OfferEval's calculator handles all of this automatically — giving you a precise net income figure for any offer you're evaluating.
Use our free calculator to get an instant net income breakdown for any UK salary — including tax, NI, student loans, and pension.
Try the calculatorWritten by OfferEval Team
Helping professionals understand UK tax and make smarter career decisions.