UK Tax Bands Explained (2026)
UK Income Tax is calculated using tax bands. Understanding which tax band you're in helps you predict your take-home pay and plan your finances. Here's how UK tax bands work for 2025/26.
How UK Tax Bands Work
UK Income Tax uses a progressive system with three main tax bands. You pay different rates on different portions of your income:
- Personal Allowance: £12,570 (tax-free)
- Basic Rate (20%): Earnings between £12,570 and £50,270
- Higher Rate (40%): Earnings between £50,270 and £125,140
- Additional Rate (45%): Earnings above £125,140
You don't pay 40% on your entire salary if you earn £60,000. You pay 20% on the first £37,700 above your Personal Allowance, then 40% only on the amount above £50,270.
Basic Rate Tax Band (20%)
The basic rate applies to most UK workers. For 2025/26:
- Taxable income range: £0 to £37,700 (after Personal Allowance)
- Tax rate: 20%
- Effective salary range: £12,570 to £50,270
If you earn £30,000, you're in the basic rate band. You pay 20% tax on £17,430 (your salary minus the Personal Allowance).
Higher Rate Tax Band (40%)
The higher rate applies to higher earners. For 2025/26:
- Taxable income range: £37,700 to £112,570 (after Personal Allowance)
- Tax rate: 40%
- Effective salary range: £50,270 to £125,140
If you earn £60,000, you pay 20% on the first £37,700 of taxable income, then 40% on the remaining £9,730.
Additional Rate Tax Band (45%)
The additional rate applies to the highest earners. For 2025/26:
- Taxable income range: Above £112,570 (after Personal Allowance)
- Tax rate: 45%
- Effective salary range: Above £125,140
If you earn £150,000, you pay 20% on the first £37,700, 40% on the next £74,870, then 45% on the remaining £24,860.
How Tax Bands Affect Take-Home Pay
Moving into a higher tax band doesn't mean all your income is taxed at the higher rate. Only the portion above the threshold is taxed at the higher rate. This means:
- Your take-home pay still increases when you get a pay rise
- You keep more than 60% of any additional income, even in the higher rate band
- Pension contributions can reduce your taxable income and keep you in a lower band
Use our take-home pay calculator to see how tax bands affect your specific salary.