UK Income Tax 2026/27: rates, bands and Personal Allowance
For most employees, take-home pay starts with one question: how much of your earnings is taxable? This guide explains the 2026/27 rules Netly Pay uses for employment income in England, Wales and Northern Ireland, with Scotland covered separately.
The 2026/27 Personal Allowance
The standard Personal Allowance is £12,570. If your adjusted net income exceeds £100,000, the allowance is reduced by £1 for every £2 above that level. It reaches zero at £125,140.
Why £100,000 to £125,140 feels expensive
Within this range you can pay 40% higher-rate tax while also losing £1 of tax-free allowance for every £2 of additional adjusted net income. That is why the effective marginal Income Tax rate on this slice can reach 60% before National Insurance or other deductions are considered.
England, Wales and Northern Ireland bands
| Band | Taxable income after allowances | Rate |
|---|---|---|
| Basic | Up to £37,700 | 20% |
| Higher | £37,701–£125,140 | 40% |
| Additional | Over £125,140 | 45% |
These are marginal bands: moving into a higher band does not make all of your income taxable at the higher percentage.
Worked example: £60,000 salary
With the standard £12,570 allowance, £47,430 is taxable. The first £37,700 of taxable income falls into the 20% band and the remaining £9,730 falls into the 40% band. National Insurance is a separate deduction.
What Netly Pay models
The calculator applies these rates to employment income and adjusts the Personal Allowance above £100,000. It is an estimate: individual tax codes, taxable benefits, multiple jobs, prior-year adjustments and other reliefs can change actual PAYE deductions.
What changes when your salary crosses a tax band?
A tax band only applies to the slice of taxable income inside that band. For example, a £55,000 salary does not mean the whole salary is taxed at 40%. With a standard Personal Allowance, the first £12,570 is tax-free, the next £37,700 is taxed at 20%, and only the remaining taxable amount is charged at 40%.
If a pay rise takes you from £49,000 to £52,000, compare the two full take-home estimates rather than multiplying the £3,000 rise by one tax rate. Income Tax, employee NI, pension salary sacrifice and student-loan deductions can all affect the difference.