WageIncome Tax Rates 2026-27 (England, Wales & Northern Ireland)
In 2026-27, income tax in England, Wales and Northern Ireland is charged in three bands - a 20% basic rate, a 40% higher rate and a 45% additional rate - which sit above a £12,570 Personal Allowance that is taxed at nothing. Each rate applies only to the slice of income that falls inside its own band, so a pay rise never re-taxes the income you already had at a higher rate on the whole amount.
| Band | Rate | Taxable income (gross) |
|---|---|---|
| Personal Allowance | 0% | £0 – £12,570 |
| Basic rate | 20% | £12,571 – £50,270 |
| Higher rate | 40% | £50,271 – £125,140 |
| Additional rate | 45% | over £125,140 |
The Personal Allowance comes first
The first £12,570 of income in 2026-27 is covered by the Personal Allowance and carries no income tax at all. Only income above that line enters the tax bands. For most people the allowance is delivered automatically through the tax code 1257L, which tells an employer how much pay to leave untaxed across the year.
The Personal Allowance is not unlimited. It is withdrawn from high earners above £100,000 and reaches zero at £125,140, which is what makes the band just below £125,140 unusually expensive. For everyone under £100,000, the full £12,570 applies.
The three rates and where they bite
Above the allowance, the basic rate of 20% applies up to a gross salary of £50,270. The next slice, from £50,270 up to £125,140, is taxed at the higher rate of 40%. Income above £125,140 is taxed at the additional rate of 45%.
These boundaries are gross-salary figures for someone with the standard allowance and no other adjustments. The full band table for 2026-27 is shown on this page, with the tax due at each threshold.
Marginal, not total: only the top slice is taxed at the top rate
A common misreading is that crossing into the higher-rate band taxes your whole income at 40%. It does not. The system is marginal: the 20% rate still applies to everything between the allowance and £50,270, and only the pounds above £50,270 are taxed at 40%.
So a worker whose salary nudges just over £50,270 pays the higher rate on only the small amount above the line, not on the rest. This is why a pay rise can never leave you worse off through income tax alone - each new pound is taxed at its own band's rate, and the pounds beneath it are untouched.
Frozen thresholds and fiscal drag
The Personal Allowance and the band thresholds are frozen until April 2028. They do not rise with inflation or wage growth, so as pay increases over time, more income is pulled above each line and taxed at a higher rate. This effect - more tax collected without any rate changing - is known as fiscal drag.
In practice, freezing the £12,570 allowance and the £50,270 higher-rate threshold means a growing number of workers cross into the 40% band each year purely because their pay has kept pace with prices while the thresholds have not.
Frequently asked questions
Do the same income tax rates apply across the whole UK?
The 20%, 40% and 45% rates apply in England, Wales and Northern Ireland. Scotland sets its own income tax bands and rates, so a Scottish taxpayer follows a different table - though National Insurance is identical everywhere in the UK.
Does the Personal Allowance overlap with the basic-rate band?
No. The £12,570 allowance sits below the bands and is taxed at nothing. The 20% basic rate then applies to income above the allowance up to £50,270 gross, so the allowance and the basic-rate band do not overlap.
Why might my effective tax rate be higher than 40%?
Between £100,000 and £125,140 the Personal Allowance is withdrawn as income rises, which adds a hidden charge on top of the 40% rate and pushes the effective marginal rate to around 60% on that band. This is covered in the 60% tax trap explainer.
General information, not advice. Estimates assume the standard 1257L tax code and typical circumstances; your payslip may differ by a pound or two because HMRC payroll software truncates at each step. Verify with HMRC or an accountant for any decision. WageReckon stores no salary data - the calculators run in your browser.
Rates for the 2026-27 tax year, current as of 24 July 2026. Source: HMRC (gov.uk). Contains public sector information licensed under the Open Government Licence v3.0. Source: HMRC / gov.uk. See how we calculate.