What is the UK Income Tax?
UK Income Tax applies in bands above the £12,570 Personal Allowance: 20% basic rate to £50,270, 40% higher rate to £125,140, and 45% additional rate above that.
Pension contributions and Gift Aid donations reduce your adjusted net income, which is what the Personal Allowance taper is measured against — making them unusually powerful between £100,000 and £125,140.
Formula & worked example
Personal Allowance = £12,570 − max(0, (adjusted − £100,000) / 2)
Tax = 20% + 40% + 45% applied band by band
Worked example: £75,000 income with £4,000 of pension contributions gives adjusted income of £71,000. The full £12,570 allowance applies, leaving £58,430 taxable: £37,700 at 20% (£7,540) and £20,730 at 40% (£8,292) = £15,832, an effective rate of 21.1%.
How to use this uk income tax calculator
- Enter your total annual income from all sources.
- Add pension contributions — they reduce adjusted net income.
- Include Gift Aid donations, which extend your basic-rate band.
- Note the marginal rate jumps to 60% between £100k and £125,140.
Smart tips
- If your income is just over £100,000, a pension contribution that brings you back under is worth 60p in the pound.
- Gift Aid donations extend your basic rate band, cutting higher-rate tax as well as helping the charity.
- Scotland sets its own Income Tax bands with a 48% top rate — these figures apply to England, Wales and Northern Ireland.
- Dividend income is taxed at its own rates — 10.75%, 35.75% and 39.35% from April 2026 — with a £500 allowance.
- Marriage Allowance lets a non-taxpayer transfer £1,260 of Personal Allowance to a basic-rate spouse.
Frequently asked questions
What are the UK Income Tax rates?
20% basic rate to £50,270, 40% higher rate to £125,140, and 45% additional rate above. The first £12,570 is tax-free.
Why is my marginal rate 60%?
Between £100,000 and £125,140 you lose £1 of Personal Allowance for every £2 earned, so each extra pound is effectively taxed at 60%.
Do pension contributions reduce Income Tax?
Yes. They reduce your adjusted net income, which lowers both your tax bill and any Personal Allowance taper.
Are Scottish tax rates different?
Yes. Scotland has six bands — starter, basic, intermediate, higher, advanced and top — with rates from 19% to 48%. This calculator uses England, Wales and Northern Ireland rates.
Want the theory behind the numbers? Browse the Money Blog for worked guides.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 15 Oct 2026. Sources: GOV.UK — Income Tax rates and Personal Allowance, GOV.UK — Marriage Allowance: transferable amount. How we check these numbers.