How Much Tax Do I Pay? UK Income Tax Breakdown 2025/26 & 2026/27
Find out exactly how much tax you pay on your UK salary in 2025/26 and 2026/27. Worked examples at £20k, £30k, £50k, £75k, and £100k with income tax, NI, and take-home pay.
Last updated: February 2026
"How much tax do I pay?" is the most common question UK employees ask — yet few people know the precise answer. That's because your total deductions aren't just income tax. National Insurance, student loans, and pension contributions all take a slice before your salary reaches your bank account.
This guide breaks down exactly how much you'll pay at five common salary levels in 2025/26, with full worked calculations you can follow. Or skip straight to your answer — use our salary calculator to see your exact take-home pay in seconds.
How UK Income Tax Works
Income tax in England, Wales, and Northern Ireland is calculated in bands. You don't pay the same rate on every pound — only the portion that falls within each band gets taxed at that rate. Scotland has its own bands, covered in our Scottish tax rates guide.
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Your Personal Allowance of £12,570 is the amount you earn completely tax-free. Understanding this is key — if someone tells you "I pay 20% tax," they're almost certainly overstating it. Your effective tax rate (the actual percentage of your total salary that goes to tax) is always lower than your marginal rate.
National Insurance on Top
National Insurance (NI) is a separate deduction that funds the State Pension and certain benefits. For employees in 2025/26:
| Earnings | Employee NI rate |
|---|---|
| Up to £12,570 (Primary Threshold) | 0% |
| £12,571 – £50,270 (Upper Earnings Limit) | 8% |
| Above £50,270 | 2% |
Unlike income tax, there's no personal allowance taper for NI — the thresholds are fixed. For the full picture, read our National Insurance guide.
Tax on a £20,000 Salary
A £20,000 salary is close to the National Living Wage for a full-time worker. Here's what you'd pay:
| Deduction | Calculation | Annual | Monthly |
|---|---|---|---|
| Income tax | £7,430 × 20% | £1,486 | £124 |
| National Insurance | £7,430 × 8% | £594 | £50 |
| Total deductions | £2,080 | £173 | |
| Take-home pay | £17,920 | £1,493 |
Effective tax rate: 10.4% — even though you're in the 20% band, more than a third of your salary is tax-free. See the full breakdown for a £20,000 salary.
Tax on a £30,000 Salary
£30,000 is close to the UK median salary and sits comfortably in the basic rate band:
| Deduction | Calculation | Annual | Monthly |
|---|---|---|---|
| Income tax | £17,430 × 20% | £3,486 | £291 |
| National Insurance | £17,430 × 8% | £1,394 | £116 |
| Total deductions | £4,880 | £407 | |
| Take-home pay | £25,120 | £2,093 |
Effective tax rate: 16.3% — you keep nearly 84p of every pound. The jump from £20k to £30k is noticeable: you earn £10,000 more but only pay £2,800 more in deductions. See the full breakdown for a £30,000 salary.
Tax on a £50,000 Salary
At £50,000, you're still just inside the basic rate band — the higher rate doesn't kick in until £50,271:
| Deduction | Calculation | Annual | Monthly |
|---|---|---|---|
| Income tax | £37,430 × 20% | £7,486 | £624 |
| National Insurance | £37,430 × 8% | £2,994 | £250 |
| Total deductions | £10,480 | £873 | |
| Take-home pay | £39,520 | £3,293 |
Effective tax rate: 21.0% — this is a sweet spot. You're earning well above the UK average but haven't yet hit the 40% band. Every extra pound above £50,270 will be taxed at 40% income tax plus 2% NI, making pension contributions or salary sacrifice especially valuable at this level. See the full breakdown for a £50,000 salary.
Tax on a £75,000 Salary
At £75,000, a significant chunk of your income is in the higher rate band:
| Deduction | Calculation | Annual | Monthly |
|---|---|---|---|
| Income tax (basic) | £37,700 × 20% | £7,540 | £628 |
| Income tax (higher) | £24,730 × 40% | £9,892 | £824 |
| NI (8%) | £37,700 × 8% | £3,016 | £251 |
| NI (2%) | £24,730 × 2% | £495 | £41 |
| Total deductions | £20,943 | £1,745 | |
| Take-home pay | £54,057 | £4,505 |
Effective tax rate: 27.9% — although your marginal rate is 42% (40% tax + 2% NI), your average across the whole salary is much lower. Still, at this level you're paying nearly £21,000 a year in tax and NI. Higher-rate taxpayers benefit most from pension tax relief — contributing to a pension effectively gives you 40p back for every £1 you put in. See the full breakdown for a £75,000 salary.
Tax on a £100,000 Salary
£100,000 is where things get tricky. Your Personal Allowance starts being withdrawn — you lose £1 of allowance for every £2 you earn above £100,000. This creates a hidden 60% effective tax rate between £100,000 and £125,140.
At exactly £100,000, your Personal Allowance is still intact:
| Deduction | Calculation | Annual | Monthly |
|---|---|---|---|
| Income tax (basic) | £37,700 × 20% | £7,540 | £628 |
| Income tax (higher) | £49,730 × 40% | £19,892 | £1,658 |
| NI (8%) | £37,700 × 8% | £3,016 | £251 |
| NI (2%) | £49,730 × 2% | £995 | £83 |
| Total deductions | £31,443 | £2,620 | |
| Take-home pay | £68,557 | £5,713 |
Effective tax rate: 31.4% — but be warned: if your salary increases to £105,000, you'd lose £2,500 of your Personal Allowance, meaning an extra £1,000 in tax on top of the 40% rate on the extra £5,000. Read our dedicated £100k tax trap guide for strategies to avoid this. See the full breakdown for a £100,000 salary.
Effective Tax Rate vs Marginal Tax Rate
These two terms cause the most confusion:
- Marginal rate — the tax you pay on the next pound you earn. If you're in the higher rate band, your marginal rate is 40% (plus 2% NI).
- Effective rate — the average tax across your entire salary. This is always lower than your marginal rate because of the tax-free Personal Allowance and the basic rate band.
Here's how they compare:
| Salary | Marginal tax rate | Marginal tax + NI | Effective rate (all deductions) |
|---|---|---|---|
| £20,000 | 20% | 28% | 10.4% |
| £30,000 | 20% | 28% | 16.3% |
| £50,000 | 20% | 28% | 21.0% |
| £75,000 | 40% | 42% | 27.9% |
| £100,000 | 40% | 42% | 31.4% |
This is why the common complaint "I pay 40% tax" is misleading. Even on a £75,000 salary, less than 28% of your total earnings go to tax and NI.
How to Reduce Your Tax Bill
You can't avoid tax entirely, but there are legitimate ways to keep more of your salary:
1. Pension Contributions
Money you put into a pension comes out of your pre-tax income (or you get tax relief added). A higher-rate taxpayer contributing £500/month to a pension effectively saves £200/month in tax. Read our pension tax relief guide for the full breakdown.
2. Salary Sacrifice
By exchanging part of your salary for benefits like pension contributions, electric car leasing, or cycle-to-work schemes, you save both income tax and National Insurance. Our salary sacrifice guide explains how it works.
3. Marriage Allowance
If your partner earns less than £12,570, they can transfer £1,260 of their Personal Allowance to you — saving up to £252 a year. It's free money that millions of couples miss. See our marriage allowance guide.
4. Check Your Tax Code
An incorrect tax code means you could be overpaying without realising it. The most common code is 1257L — if yours is different, check it with HMRC.
5. The £100k Pension Strategy
If you earn between £100,000 and £125,140, making pension contributions to bring your adjusted net income below £100,000 restores your full Personal Allowance. This can give you effective tax relief of over 60%. Read more in our £100k tax trap guide.
What About Student Loans?
Student loan repayments are another deduction from your pay, though they don't count as "tax." For 2025/26:
| Plan | Repayment threshold | Rate |
|---|---|---|
| Plan 1 (pre-2012) | £24,990 | 9% |
| Plan 2 (post-2012) | £27,295 | 9% |
| Plan 5 (from 2023) | £25,000 | 9% |
| Postgraduate | £21,000 | 6% |
On a £30,000 salary with a Plan 2 loan, you'd repay an extra £243 a year — bringing total deductions to around £5,123. Our student loan repayment guide has the full details.
Quick Answers to Common Questions
How much tax do I pay on £25,000?
Income tax of £2,486 plus NI of £994, totalling £3,480 in deductions. Your take-home pay would be £21,520 — an effective rate of 13.9%. See the full £25,000 breakdown.
How much tax do I pay on £40,000?
Income tax of £5,486 plus NI of £2,194, totalling £7,680 in deductions. Your take-home pay would be £32,320 — an effective rate of 19.2%. See the full £40,000 breakdown.
How much tax do I pay on £60,000?
Income tax of £11,432 (basic + higher rate) plus NI of £3,190, totalling £14,622 in deductions. Your take-home pay would be £45,378 — an effective rate of 24.4%. See the full £60,000 breakdown.
Do I pay tax on overtime?
Yes — overtime is taxed at your marginal rate, just like your regular salary. If your total income (including overtime) crosses into the higher rate band, the overtime portion above £50,270 will be taxed at 40%. But your base salary isn't affected — it's still taxed at the same rate as before.
When do I start paying tax?
You pay income tax on any earnings above £12,570 in the 2025/26 tax year. If you earn less than this, you owe nothing. National Insurance starts at the same threshold.
See Your Exact Take-Home Pay
The figures above are simplified — they don't account for pension contributions, student loans, Scottish tax rates, or specific tax code situations. For a precise, personalised calculation:
Use our free salary calculator — enter your salary and see a full breakdown of income tax, NI, student loans, pension, and your exact monthly and weekly take-home pay for 2025/26.
Ready to calculate your take-home pay?
Use our free salary calculator with the latest 2025/26 rates.
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