Take an employee earning £60,000 of taxable income in 2026/27 in England, Wales, or Northern Ireland. Because that is below the £100,000 taper threshold, they keep the full £12,570 Personal Allowance, so only £47,430 is actually taxed. The first £37,700 of that taxable slice falls in the basic-rate band at 20 percent, producing £7,540. The remaining £9,730 sits in the higher-rate band at 40 percent, adding £3,892. Total income tax is £11,432, an effective rate of 19.05 percent because most of the salary is still taxed at 0 or 20 percent.
Step
Band
Tax
Personal Allowance
£0 to £12,570 at 0%
£0
Basic rate
£37,700 at 20%
£7,540
Higher rate
£9,730 at 40%
£3,892
Income tax
Effective 19.05%
£11,432
How it is calculated
UK income tax is progressive, so only the income inside each band is charged at that band's rate, never your whole salary. Everyone starts with a £12,570 Personal Allowance taxed at 0 percent. The next £37,700 of taxable income is the basic rate at 20 percent, then income up to £125,140 is the higher rate at 40 percent, and anything above that is the additional rate at 45 percent. The calculator first works out your Personal Allowance, reducing it by £1 for every £2 of income above £100,000 until it disappears at £125,140. It then applies each rate to the slice of taxable income that falls in that band and sums the parts. This figure is income tax only and does not include National Insurance or student loan repayments, which the take-home calculator adds on top.
Frequently asked questions
60% effective rate band?
Between £100,000 and £125,140 of adjusted net income, the Personal Allowance tapers by £1 per £2 over £100k. Combined with 40% higher rate this creates an effective marginal rate of 60% on income in that band.
What is the Personal Allowance for 2026/27?
The standard Personal Allowance is £12,570, meaning you pay no income tax on the first £12,570 of income. This amount is frozen until at least 2028 under current government policy. It reduces by £1 for every £2 earned above £100,000 and disappears entirely at £125,140.
Does this calculator include National Insurance?
No, this calculator shows income tax only. National Insurance is a separate deduction calculated at different thresholds and rates. Use the Take-Home Pay calculator on this site if you want to see both income tax and National Insurance deducted together.
What are the income tax bands for 2026/27?
After the Personal Allowance (0%), the basic rate applies to the next £37,700 of taxable income at 20%. Income from £50,271 to £125,140 is taxed at the higher rate of 40%. Any income above £125,140 is taxed at the additional rate of 45%.