UK Income Tax Calculator 2026/27 – Take-Home Pay After Tax, NI, Pension & Student Loans

UK income tax is progressive. For 2026/27, the personal allowance is £12,570 (tax-free). Basic rate (20%) applies to £12,571–£50,270, higher rate (40%) to £50,271–£125,140, and additional rate (45%) above £125,140. Scotland has separate bands: Starter (19%), Basic (20%), Intermediate (21%), Higher (42%), and Top (47%). Wales follows the same bands as England. Our calculator applies your selected region's bands to give an accurate estimate.

The 60% tax trap affects earners between £100,000 and £125,140. In this range, your personal allowance reduces by £1 for every £2 earned above £100,000, creating an effective marginal rate of 60%. For example, earning £110,000 means you lose £5,000 of your allowance, adding £2,000 to your tax bill. Pension contributions are the most effective way to reduce this — every £1 contributed to a pension via salary sacrifice saves 60p in tax and NI.

In 2026/27, most employees pay 8% National Insurance on earnings between £12,571 and £50,270, and 2% on earnings above £50,270. Unlike income tax, NI is calculated per pay period rather than cumulatively across the year. If you earn £40,000, your NI contribution is approximately £2,194. Company directors and self-employed individuals pay different rates including Class 2 (£3.45/week) and Class 4 NIC (6% on profits between £12,570 and £50,270, 2% above).

Your marginal tax rate is the tax rate you pay on your next pound of income — either 20%, 40%, or 45% depending on your tax band. Your effective tax rate is your total income tax and National Insurance as a percentage of your gross income. For example, someone earning £40,000 has a marginal rate of 20% but an effective rate of approximately 19% (excluding NI). Understanding both is crucial when evaluating a pay rise, a second job, or negotiating a salary.

Three main methods exist: (1) Relief at Source — the pension provider adds 20% automatically; you pay tax on your full salary but the provider claims basic rate relief; higher-rate taxpayers must claim additional relief via self-assessment. (2) Net Pay Arrangement — contributions are deducted before tax, giving automatic full relief without needing to claim anything. (3) Salary Sacrifice — your employer pays the contribution directly, reducing both your taxable income and NI. Salary sacrifice is the most tax-efficient method overall.

Student loan repayments are deducted directly from your salary by your employer. Each plan has its own threshold and rate: Plan 1 (pre-2012): 9% above £22,015/year. Plan 2 (2012-2023): 9% above £27,295. Plan 4 (Scotland): 9% above £27,660. Plan 5 (post-2023): 9% above £25,000. Postgraduate Loan: 6% above £21,000. Repayments continue until the loan is fully repaid or written off after 30 years (Plan 2, Plan 5), 25 years (Plan 1), or 30 years (Plan 4). If you have both an undergraduate and postgraduate loan, you repay both simultaneously on their respective thresholds.

Scotland has five income tax bands versus three in England, Wales, and Northern Ireland. For 2026/27: Starter Rate 19% (£1–£2,162), Basic Rate 20% (£2,163–£13,118), Intermediate Rate 21% (£13,119–£20,960), Higher Rate 42% (£20,961–£74,667), Top Rate 47% (over £74,667). A Scottish resident earning £60,000 pays approximately £1,500–£2,000 more income tax than someone in England earning the same salary. Use the region selector to see your exact Scottish tax liability.

Salary sacrifice reduces your gross salary before tax and NI, saving up to 47% (income tax + NI) for higher-rate taxpayers. For example, sacrificing £3,000 into a pension saves up to £1,410 in tax and NI. However, salary sacrifice reduces your reported salary for mortgage affordability checks, state pension calculations, employer pension contributions (if based on gross salary), and some state benefits like maternity/paternity pay. Always weigh the tax savings against these potential impacts.

The High Income Child Benefit Charge (HICBC) applies when you or your partner earn over £50,000. The charge is 1% of child benefit for every £100 earned between £50,000 and £60,000. Above £60,000, you repay 100% of child benefit received. For example, with one child at £1,248/year child benefit, earning £55,000 means repaying 50% (£624). This calculator does not include the HICBC — use HMRC's Child Benefit Tax Calculator for a full calculation.

The calculator is accurate for standard 2026/27 tax calculations including: income tax bands for all UK regions, personal allowance taper, National Insurance, student loan repayments (Plan 1-5 and Postgraduate), pension contributions, and salary sacrifice. It does not include: Marriage Allowance, Blind Person's Allowance, Gift Aid charitable donations, the High Income Child Benefit Charge, dividend tax, or capital gains tax. Use it as a planning tool and consult HMRC or a qualified accountant for definitive calculations, especially for complex situations involving self-assessment, multiple income sources, or non-standard reliefs.