Income Tax Calculator UK

Income tax uses the Personal Allowance (£12,570 — 0% rate) followed by progressive bands: 20% basic rate to £50,270, 40% higher to £125,140, 45% additional above. Scotland has its own 6-band system with the top rate at 48% above £125,140. Above £100,000 the Personal Allowance tapers (£1 lost per £2 over £100k), creating a 60% effective marginal rate up to £125,140.

Pension contributions get tax relief at your marginal rate. Personal pensions: contributions get 20% relief automatically (basic rate), and higher/additional rate taxpayers can claim the extra 20-25% through their tax return. Workplace pensions via salary sacrifice: contributions come off your gross income before tax AND NIC — saving 28-47% depending on your rate. Annual allowance £60,000 (or 100% of earnings, whichever is lower).

Gift Aid lets registered UK charities reclaim 25% of your donation from HMRC at the basic rate — so £100 to a charity is worth £125 to them. If you're a higher rate (40%) taxpayer, you can claim an extra 25p per £1 donated (or 31.25p at additional 45% rate) through your Self Assessment. To qualify you must have paid enough UK tax to cover the basic rate the charity is reclaiming.

When your taxable income exceeds £100,000, your £12,570 Personal Allowance reduces by £1 for every £2 over £100k. By £125,140 it's fully gone. This creates an effective 60% marginal tax rate on income between £100k and £125,140 — one of the worst tax bands in the developed world. Common escape: salary sacrifice into pension to keep adjusted net income below £100k.

Scotland sets its own income tax bands. Scottish residents earning over £43,662 pay 42% (vs 20% in England) — and the top rate (48%) is 3% higher than rUK. National Insurance is UK-wide and unchanged. The calculator lets you toggle between the two regimes. Note: tax residency is based on where you live, not where you work.

No — this is income tax only. NIC (Class 1 employee) is calculated separately by our Salary Calculator. The two combined produce your full PAYE deductions. Self-employed pay Class 2 (£3.45/week) + Class 4 (6%/2%) instead.

No — dividends have their own rates: 8.75% basic, 33.75% higher, 39.35% additional, plus a £500 dividend allowance (£1k pre-2024). They use the same income bands. Most directors of small companies optimize by taking a low salary + dividends to minimize tax + NIC. This calculator treats all income as ordinary earnings.

If your spouse / civil partner earns under £12,570 (Personal Allowance), they can transfer £1,260 of unused allowance to you, saving you up to £252/year (£1,260 × 20%). Both must be born after 5 April 1935. Apply on gov.uk. Not modeled in this calculator — subtract £252 from your total tax if eligible.