Key takeaways
- UK income tax has three bands in England, Wales and Northern Ireland: 20% on taxable income up to £37,700, 40% up to £125,140, and 45% above.
- The bands apply to taxable income, not to your salary — taxable income is your salary minus your pension contribution minus your £12,570 personal allowance.
- A pay rise cannot make you worse off in cash terms — the higher rate applies only to the slice above the line, never to the pay below it.
- Above £100,000 you lose £1 of personal allowance for every £2 you earn, so the effective marginal rate is 60% between £100,000 and £125,140.
UK income tax has three bands in England, Wales and Northern Ireland: 20% on taxable income up to £37,700, 40% up to £125,140, and 45% above — and the £100,000 taper makes the middle of that range effectively 60%.
Income tax bands are the most misunderstood numbers in British personal finance. People say "I pay 40% tax" when they mean their top slice is taxed at 40%, and they worry that a pay rise will push all of their pay into a higher band — which it never does. The system is marginal: each band taxes only the slice of your pay that falls inside it. This article explains the bands, works them out at seven salaries from £35,000 to £150,000, and shows exactly where the traps are.
The bands
First, the key distinction: the bands apply to taxable income, not to your salary. Taxable income is your salary minus your pension contribution minus your personal allowance (£12,570 for most people in 2026/27). Only what is left is banded. That is why a £50,270 salary does not mean £50,270 of taxable pay — it means £37,700, which is exactly the top of the basic-rate band.
| Band | Rate | Taxable income | Gross salary at full allowance |
|---|---|---|---|
| Personal allowance | 0% | £0 | Up to £12,570 |
| Basic rate | 20% | £1 – £37,700 | £12,571 – £50,270 |
| Higher rate | 40% | £37,701 – £125,140 | £50,271 – £137,710 |
| Additional rate | 45% | Above £125,140 | Above £137,710 |
The gross-salary column is a convenience, not a rule: it assumes the full £12,570 allowance and no pension. A pension moves every line higher, because it comes off before tax. So does a smaller allowance — a K code, or the taper above £100,000. The taxable-income column is the rule; the salary column is what it looks like for the simplest case.
Worked examples: £35,000 to £150,000
All figures below use tax code 1257L, England, Wales or Northern Ireland, and no pension — so these are the pure tax figures, and the band splits are clean.
| Salary | Taxable pay | Income tax / year | Marginal rate | Band split |
|---|---|---|---|---|
| £35,000 | £22,430.00 | £4,486.00 | 28% | £22,430 at 20% |
| £50,000 | £37,430.00 | £7,486.00 | 28% | £37,430 at 20% |
| £60,000 | £47,430.00 | £11,432.00 | 42% | £37,700 at 20% + £9,730 at 40% |
| £100,000 | £87,430.00 | £27,432.00 | 62% | £37,700 at 20% + £49,730 at 40% |
| £110,000 | £102,430.00 | £33,432.00 | 62% | £37,700 at 20% + £64,730 at 40% (allowance tapered to £7,570) |
| £125,140 | £125,140.00 | £42,516.00 | 47% | £37,700 at 20% + £87,440 at 40% (allowance £0) |
| £150,000 | £150,000.00 | £53,703.00 | 47% | £37,700 at 20% + £87,440 at 40% + £24,860 at 45% |
Three things to notice. First, the marginal rate column is the rate on your next pound — tax plus National Insurance (and the taper effect where it applies). At £35,000 it is 28%: 20% tax plus 8% NI. At £60,000 it is 42%: 40% tax plus 2% NI. Second, at £50,000 the whole taxable pay is still basic-rate: the £50,270 line is the point where the higher rate begins, not £50,000. Third, the £150,000 row is the only one that touches all three bands — and even there, most of the tax is still charged at 20% and 40%, not 45%.
The £60,000 row deserves a closer look, because it is where most people first meet the higher rate. Taxable pay is £47,430. The first £37,700 is taxed at 20% (£7,540.00) and the remaining £9,730 at 40% (£3,892.00), for a total of £11,432.00. The higher rate costs £1,946.00 a year more than if the whole amount had been taxed at 20% — which is the price of crossing the line, and it is much smaller than people fear.
The £100,000 trap: the 60% band
The most expensive band in the system is not in the table above, because it is not a band at all. Above £100,000 you lose £1 of personal allowance for every £2 you earn, so your allowance falls from £12,570 to £0 by £125,140. Losing allowance is the same as being taxed on it: each extra £1 of pay is taxed at 40%, and it also drags 50p of previously tax-free pay into the 40% band, which costs another 20p. The effective marginal rate on income tax alone is 60% between £100,000 and £125,140 — 62% with National Insurance.
At £110,000 the taper has already taken £5,000 of allowance, leaving £7,570. The tax bill is £33,432.00, and take-home pay is £72,357.40 (with a Plan 2 student loan it is £65,102.05, and the marginal rate on the next pound is 71%). Pension contributions and salary sacrifice reduce the income counted for the taper, which is why they are so valuable in this range: every £1 sacrificed restores 50p of allowance as well as escaping 40% tax.
Scotland: six bands instead of three
Scotland runs its own bands on the same £12,570 allowance: 19% starter, 20% basic, 21% intermediate, 42% higher, 45% advanced and 48% top. At £50,000 a Scottish taxpayer pays £8,982.05 of tax against £7,486.00 in England — £1,496.05 more — because the 42% band starts at £43,663 of gross pay, far below England's £50,270. At £30,000 Scotland is actually cheaper, by £34.93, thanks to the 19% starter rate. The full comparison is on the Scotland page: the crossover sits just above £30,000.
What people get wrong
The first mistake is thinking a pay rise can make you worse off. It cannot, in cash terms — the higher rate applies only to the slice above the line, never to the pay below it. A rise from £49,000 to £51,000 does not re-tax your first £50,270 at 40%; it taxes £730 of the rise at 40% and keeps the rest at 20%. You always keep something.
The second mistake is confusing the marginal rate with the effective rate. At £60,000 your marginal rate is 42% but your effective income-tax rate is 19.1% — you pay £11,432.00 of tax on £60,000 of pay. Headlines about 40% taxpayers usually mean people whose top slice is taxed at 40%, not people who pay 40% of everything. Your effective rate is the number that describes your actual burden, and it is always much lower than your marginal rate.
The third mistake is forgetting the pension. Because pension comes off before tax, it moves the band lines. With the usual auto-enrolment pension, a £50,000 salary has taxable pay of £35,242.00 and tax of £7,048.40 — £437.60 less than the no-pension figure. At £60,000 the pension saves £880.60 of tax. The bands do not move; your pay moves within them.
See your own bands
Enter your salary in the income tax calculator — it draws the band visual for your pay, slice by slice. To compare nations, read Scotland vs England take-home: £30k / £50k / £75k compared — and the 2026/27 rates behind every figure on this page.
Questions
How much income tax do I pay on £50,000?
£7,486.00 a year with tax code 1257L and no pension. Your taxable pay is £37,430, and all of it sits in the 20% basic-rate band. With the usual auto-enrolment pension your tax falls to £7,048.40, because the pension comes off before tax.
What are the UK income tax bands for 2026/27?
In England, Wales and Northern Ireland: 20% basic rate on taxable income up to £37,700, 40% higher rate up to £125,140, and 45% additional rate above that. Taxable income is your pay after the £12,570 personal allowance and any pension. Scotland has six bands from 19% to 48%.
At what salary do I start paying 40% tax?
At a gross salary of £50,270 with the full £12,570 personal allowance and no pension — that is where your taxable pay reaches £37,700, the top of the basic-rate band. With a pension, the line moves higher, because the pension comes off first.
Work out your tax at any salary
The bands apply to taxable income, not to your salary — enter your pay in the income tax calculator and see which slice falls in each band.
Figures are for tax year 2026/27, tax code 1257L, England, Wales or Northern Ireland, no pension unless stated, no student loan unless stated. Rates: GOV.UK — last checked 5 November 2026. This site is not affiliated with HMRC or GOV.UK. Figures are estimates for guidance, not financial advice.