UK Income Tax Calculator 2025/26
Calculate your take-home pay after income tax, National Insurance, pension contributions, and student loan repayments. Rates are for the 2025/26 tax year (6 April 2025 – 5 April 2026).
| Annual | Monthly | Weekly | |
|---|---|---|---|
| Gross Salary | £45,000.00 | £3,750.00 | £865.38 |
| Income Tax | -£6,036.00 | -£503.00 | -£116.08 |
| National Insurance | -£2,594.40 | -£216.20 | -£49.89 |
| Pension | -£2,250.00 | -£187.50 | -£43.27 |
| Take-Home Pay | £34,119.60 | £2,843.30 | £656.15 |
Income Tax Breakdown:
| Band | Range | Rate | Taxable | Tax |
|---|---|---|---|---|
| Basic rate | £12,571 – £50,270 | 20% | £30,180.00 | £6,036.00 |
| Total Income Tax | £6,036.00 | |||
How UK Income Tax Works (PAYE)
If you are an employee in the United Kingdom, your income tax and National Insurance are deducted at source through the PAYE (Pay As You Earn) system. Your employer uses a tax code supplied by HMRC to calculate exactly how much to deduct from each pay period. This means most employees receive their correct net pay without ever submitting a tax return.
The UK tax year runs from 6 April to 5 April the following year. The 2025/26 tax year therefore covers 6 April 2025 to 5 April 2026. Tax bands and thresholds are set by the government in the annual Budget and apply from the start of each tax year.
Income Tax Bands 2025/26
UK income tax uses a progressive band system. You do not pay one flat rate on all of your income. Instead, each "slice" of income is taxed at progressively higher rates as it falls into higher bands.
| Band | Income Range | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 – £50,270 | 20% |
| Higher Rate | £50,271 – £125,140 | 40% |
| Additional Rate | Above £125,140 | 45% |
For example, if your gross salary is £55,000, your income tax is calculated as follows:
First £12,570 = £0 (personal allowance) £12,571 to £50,270 = £37,700 × 20% = £7,540 £50,271 to £55,000 = £4,730 × 40% = £1,892 Total Income Tax = £9,432
The Personal Allowance Taper
Most people receive the standard personal allowance of £12,570. However, if your adjusted net income exceeds £100,000, the allowance is reduced by £1 for every £2 of income above that level. At £125,140 the personal allowance disappears entirely.
This taper creates an effective 60% marginal tax rate on income between £100,000 and £125,140 (40% tax on the income itself plus 40% on the extra income now exposed by the lost allowance, netting 60% on each additional pound). This is one of the most counterintuitive aspects of the UK tax system.
Tip: Pension contributions reduce your adjusted net income. If your income is between £100,000 and £125,140, paying into a pension can restore your personal allowance and deliver an effective 60% tax relief on those contributions.
National Insurance Contributions 2025/26
National Insurance (NI) is a separate levy paid by both employees and employers. Employee Class 1 NI contributions for 2025/26 are:
- 8% on earnings between £12,570 and £50,270 per year
- 2% on earnings above £50,270 per year
- 0% on earnings up to £12,570 (the Primary Threshold)
NI is calculated on your gross pay. Unlike income tax, standard pension contributions through a personal pension do not reduce your NI bill. However, if your employer operates a salary sacrifice arrangement, your pensionable pay is reduced before NI is applied, generating NI savings for both you and your employer.
Your NI contributions go towards your entitlement to the State Pension and certain other contributory benefits. You need 35 qualifying years of NI contributions to receive the full new State Pension.
Pension Contributions and Tax Relief
Contributions to a pension scheme are one of the most tax-efficient ways to save money in the UK. When you contribute to a pension, those contributions are deducted from your gross income before income tax is calculated. This means:
- A basic-rate (20%) taxpayer effectively pays only 80p for every £1 invested in their pension
- A higher-rate (40%) taxpayer pays only 60p per £1 (additional relief claimed via self-assessment)
- An additional-rate (45%) taxpayer pays only 55p per £1
The annual allowance for pension contributions is £60,000 for 2025/26 (or 100% of your earnings if lower). This limit covers both employee and employer contributions.
Student Loan Repayments
Student loan repayments are collected through PAYE alongside income tax and NI. You repay a percentage of earnings above a threshold, which varies by loan plan:
| Plan | Who | Threshold 2025/26 | Rate |
|---|---|---|---|
| Plan 1 | Pre-2012 English/Welsh; any NI graduate | £24,990 | 9% |
| Plan 2 | Post-2012 English/Welsh undergraduate | £27,295 | 9% |
| Plan 4 | Scottish graduates | £31,395 | 9% |
| Plan 5 | New English/Welsh students from 2023/24 | £25,000 | 9% |
| Postgraduate | Postgraduate loan holders | £21,000 | 6% |
Repayments are not technically a "tax" — they do not reduce your adjusted net income for tax purposes. They are deducted after tax and NI from your take-home pay. Plans 1, 2, 4, and 5 are all written off after a set number of years (25–40 years depending on the plan), or if you become permanently disabled.
Frequently Asked Questions
What is PAYE and how does it work?
PAYE (Pay As You Earn) is the UK system where your employer deducts income tax and National Insurance directly from your pay before you receive it. HMRC issues each employee a tax code (e.g., 1257L) that tells your employer how much personal allowance to apply. Most employees never need to file a tax return because PAYE collects the right amount throughout the year.
What is the personal allowance for 2025/26?
The standard personal allowance for 2025/26 is £12,570. This is the amount of income you can earn each year without paying income tax. However, if your income exceeds £100,000, the allowance tapers away at a rate of £1 for every £2 earned above that threshold, creating an effective 60% marginal tax rate in the £100,000–£125,140 range.
How is National Insurance calculated for employees?
Employees pay Class 1 National Insurance contributions. For 2025/26, the rate is 8% on earnings between the Primary Threshold (£12,570) and the Upper Earnings Limit (£50,270), and 2% on earnings above £50,270. NI is calculated on gross earnings — unlike income tax, pension contributions do not reduce your NI bill unless your employer uses a salary sacrifice arrangement.
Does pension contribution reduce my tax?
Yes. Personal pension contributions (including those to a workplace pension) are made from pre-tax income, meaning they reduce your taxable income. If you earn £50,000 and contribute £5,000 (10%) to your pension, you are taxed as if you earned £45,000. This gives basic-rate taxpayers 20% relief and higher-rate taxpayers 40% relief, making pensions a very tax-efficient savings vehicle.
What are the UK income tax bands for 2025/26?
The 2025/26 bands are: Personal allowance £0–£12,570 (0%); Basic rate £12,571–£50,270 (20%); Higher rate £50,271–£125,140 (40%); Additional rate above £125,140 (45%). Note that in the £100,000–£125,140 taper zone your effective marginal rate is 60% because you lose £1 of personal allowance for every £2 earned.
Which student loan plan do I have?
Plan 1 applies if you started your undergraduate course before 1 September 2012 (or you are from Northern Ireland). Plan 2 applies if you started in England or Wales on or after 1 September 2012. Plan 4 applies to Scottish graduates. Plan 5 applies to new English/Welsh students starting from 2023/24. Postgraduate loans are separate from these plans. Your payslip or Student Loans Company correspondence will confirm your plan.