How income tax and National Insurance work in 2026/27
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Two things come out of most pay packets: income tax and National Insurance (NI). Both are charged in bands, so each rate only applies to the slice of pay inside that band. Moving into a higher band never reduces what you keep from the pay below it.
The figures here apply in England, Wales and Northern Ireland from 6 April 2026 to 5 April 2027. Scotland sets its own income tax bands.
Income tax bands
- Personal allowance: the first £12,570 you earn is tax-free.
- Basic rate: 20% on income from £12,571 to £50,270.
- Higher rate: 40% on income from £50,271 to £125,140.
- Additional rate: 45% on income above £125,140.
National Insurance
Employees pay NI at 8% on earnings between £12,570 and £50,270 a year, and 2% on anything above that. NI is worked out on each payslip, not over the whole year. If your pay changes from month to month, the total can differ a little from an annual estimate. You stop paying NI when you reach State Pension age.
The personal allowance taper above £100,000
Once your income goes over £100,000, you lose £1 of personal allowance for every £2 above it. At £110,000 the allowance is down to £7,570. At £125,140 it has gone completely.
This makes each extra £100 between £100,000 and £125,140 cost £60 in income tax. That is £40 at the higher rate, plus £20 because another £50 of your income is no longer tax-free. With 2% NI on top, you keep £38 of that £100. Pension contributions and Gift Aid donations reduce the income figure used for the taper.
Worked examples
Each example assumes one job, the standard personal allowance, no pension contributions and no student loan. Figures are rounded to the nearest pound.
£25,000 a year
Take off the £12,570 allowance and £12,430 is taxable. Income tax at 20% is £2,486. NI at 8% on the same amount is £994. Take-home pay is £21,520 a year, or about £1,793 a month.
£35,000 a year
£22,430 is taxable. Income tax at 20% is £4,486 and NI at 8% is £1,794. Take-home pay is £28,720 a year, or about £2,393 a month.
£60,000 a year
This salary crosses into the higher rate. You pay 20% on the £37,700 between £12,570 and £50,270, which is £7,540. You pay 40% on the £9,730 above £50,270, which is £3,892. Income tax comes to £11,432. NI is 8% on the first slice and 2% on the second, £3,211 in total. Take-home pay is £45,357 a year, or about £3,780 a month.
Common questions
Do I pay 40% tax on everything if I earn over £50,270?
No. The 40% rate only applies to the part of your income above £50,270. Everything below that is still tax-free or taxed at 20%, so a pay rise into the higher band still leaves you with more take-home pay.
How much tax do I pay on £30,000?
On £30,000 a year you pay £3,486 in income tax and £1,394 in NI. That leaves £25,120 a year, or about £2,093 a month.
Why is my payslip different from this calculator?
The usual reasons are pension contributions, student loan repayments, a tax code other than 1257L, taxable benefits such as a company car, or starting the job part way through the tax year.
Is income tax different in Scotland?
Yes. Scottish taxpayers pay income tax at rates and bands set by the Scottish Government, so their take-home pay is different. NI is the same across the UK. This calculator does not cover Scottish rates.
Where these figures come from
HMRC publishes the 2026/27 rates on gov.uk. See income tax rates and personal allowances and how much National Insurance you pay.