Your payslip tells two stories. There is the salary your employer agreed to pay you, and there is the amount that actually lands in your bank account. The gap between those two numbers is mostly income tax and National Insurance, and the rules for the 2026/27 tax year (6 April 2026 to 5 April 2027) decide exactly how big that gap is.
This guide walks through the main figures for England, Wales and Northern Ireland, then covers Scotland separately because it sets its own income tax bands, so you can read your payslip with confidence and plan ahead.
Gross pay versus net pay
Gross pay is the total your employer agrees to pay you before any deductions. Net pay, often called take-home pay, is what is left after income tax, National Insurance, pension contributions, student loan repayments and any salary sacrifice.
A useful way to picture it: out of every pound you earn above the tax-free allowance, the government takes a slice for income tax, and another slice for National Insurance. Pension contributions are deducted too, but they are your money, just saved for later.
If you want a quick estimate for your own situation, you can use the National Calculators UK salary calculator to break a gross figure down into monthly and weekly take-home pay.
The Personal Allowance
For 2026/27, most people can earn £12,570 a year before paying any income tax. This is the standard Personal Allowance, and it has been frozen at this level since 2021/22. The freeze now runs to 2030/31, so the figure is unchanged again this year.
There are two important catches. First, if your income goes above £100,000, the allowance is reduced by £1 for every £2 you earn above that threshold, and disappears entirely at £125,140. Second, your tax code controls how the allowance is applied through PAYE. A wrong code is one of the most common reasons people overpay or underpay tax.
Income tax bands for 2026/27
For England, Wales and Northern Ireland, the bands above the Personal Allowance are unchanged from last year under the freeze:
- Basic rate, 20%: taxable income from £12,571 to £50,270
- Higher rate, 40%: taxable income from £50,271 to £125,140
- Additional rate, 45%: taxable income above £125,140
The bands work in slices. Someone earning £60,000 does not pay 40% on the whole salary. They pay 0% on the first £12,570, 20% on the next £37,700, and 40% only on the £9,730 above the higher-rate threshold.
If you live in Scotland, your Personal Allowance is the same, but the rates and thresholds above it differ. Scotland gets its own section below.
Full official figures sit on the government pages: Income Tax rates and Personal Allowances and the HMRC summary at Rates and allowances for Income Tax.
Scotland’s income tax bands for 2026/27
Scotland sets its own income tax, decided by the Scottish Parliament, and it uses six bands rather than three. The Personal Allowance and National Insurance are the same as the rest of the UK, but the rates above the allowance run: Starter 19%, Basic 20%, Intermediate 21%, Higher 42%, Advanced 45% and Top 48%. The higher rate begins at £43,662, lower than the £50,270 point used elsewhere, so a Scottish taxpayer crosses into 40%-plus territory earlier.
For 2026/27, the Scottish Budget of 13 January 2026 widened the starter band (up to £16,537) and the basic band (up to £29,526), which leaves most Scottish earners paying slightly less income tax than in 2025/26. The higher, advanced and top thresholds stay frozen.
The effect shows on a real salary. On £50,000, a taxpayer in England, Wales or Northern Ireland pays £7,486 of income tax and £2,994.40 of National Insurance, leaving about £39,520. The same salary in Scotland is taxed across the starter, basic, intermediate and higher bands for £8,982.05 of income tax, with the identical £2,994.40 of National Insurance, leaving about £38,024. The Scottish taxpayer keeps roughly £1,496 less, all of it down to income tax rather than National Insurance. The UK salary calculator has a Scotland setting that applies these bands for you. Current figures are published by the Scottish Government.
National Insurance in 2026/27
National Insurance is the UK version of social security, funding the state pension and parts of the NHS. For employees (Class 1), the main 2026/27 rates are also unchanged from last year:
- 8% on weekly earnings between £242 and £967 (the Primary Threshold to the Upper Earnings Limit, which line up with the £12,570 and £50,270 annual figures)
- 2% on earnings above £967 a week
You stop paying NI once you reach State Pension age, even if you keep working. The current rates and thresholds are published by HMRC at National Insurance rates and categories.
If you are self-employed, the picture is different. Class 2 has been largely abolished for most profits, and Class 4 is charged at 6% between £12,570 and £50,270 of profit, and 2% above that.
Putting it together: a worked example
Take a salary of £40,000 in England for 2026/27:
- Personal Allowance covers the first £12,570, no tax.
- The remaining £27,430 falls in the basic rate band, so income tax is £5,486.
- National Insurance at 8% on the same £27,430 is £2,194.40.
- Total deductions: £7,680.40, leaving take-home pay of roughly £32,319.60 a year, before any pension or student loan.
To check different scenarios, try the UK income tax calculator or browse other tools on the National Calculators UK hub.
Take-home pay at a glance (2026/27)
These are England, Wales and Northern Ireland figures, before any pension or student loan. Scotland’s totals differ because of its separate bands.
| Gross salary | Income tax | National Insurance | Take-home | Effective rate |
|---|---|---|---|---|
| £30,000 | £3,486 | £1,394 | £25,120 | 16.3% |
| £40,000 | £5,486 | £2,194 | £32,320 | 19.2% |
| £60,000 | £11,432 | £3,211 | £45,357 | 24.4% |
| £100,000 | £27,432 | £4,011 | £68,557 | 31.4% |
| £125,140 | £43,145 | £4,513 | £77,482 | 38.1% |
The effective rate climbs with income because more of your salary sits in the higher bands, but it stays well below the headline 40 or 45 percent because the lower slices are taxed gently or not at all.
Scotland take-home at a glance (2026/27)
Scotland’s six-band system taxes middle incomes a little less and higher incomes a little more than the rest of the UK. National Insurance is identical, so every difference below is income tax. These figures use the starter, basic, intermediate, higher and advanced bands set out above, before any pension or student loan.
| Gross salary | Income tax | National Insurance | Take-home | Effective rate |
|---|---|---|---|---|
| £30,000 | £3,451 | £1,394 | £25,155 | 16.2% |
| £40,000 | £5,551 | £2,194 | £32,255 | 19.4% |
| £50,000 | £8,982 | £2,994 | £38,024 | 24.0% |
| £60,000 | £13,182 | £3,211 | £43,607 | 27.3% |
| £100,000 | £30,732 | £4,011 | £65,257 | 34.7% |
Compare the rows with the England table above and the pattern is clear. Up to about £30,000 a Scottish taxpayer keeps marginally more, because the starter and basic bands shave a point off part of the income. From the higher rate onward the gap flips the other way: Scotland’s 42, 45 and 48 percent bands, and a higher-rate threshold that starts at £43,662 rather than £50,270, pull more tax from larger salaries. On £60,000 the Scottish bill runs roughly £1,750 more than in England, and the distance widens further up the scale.
The £100,000 trap
Income tax has a quiet sting between £100,000 and £125,140. Above £100,000 your Personal Allowance shrinks by £1 for every £2 you earn, so each extra £2 of salary is taxed at 40 percent and also drags £1 of previously tax-free income into the 40 percent band. The result is an effective 60 percent income tax rate across that £25,140 stretch, and 62 percent once the 2 percent National Insurance is added. It is why a bonus that pushes you just past £100,000 can feel like it barely moved your take-home pay. Pension contributions or salary sacrifice that bring your adjusted income back below £100,000 are the usual way to claw the allowance back. The pay rise calculator shows how much of a raise you actually keep once these effects bite.
FAQ
Why does my tax code matter so much? Your tax code tells your employer how much of your salary is tax-free. The standard 2026/27 code is still 1257L, reflecting the frozen £12,570 allowance. If yours looks different, HMRC may be adjusting for benefits, underpaid tax from a previous year, or a second job. A wrong code can quietly cost you hundreds of pounds, so it is worth checking on your personal tax account.
Do I pay National Insurance on a workplace pension? No. Workplace pensions in payment are subject to income tax, but not National Insurance. That is one reason pension income can feel slightly higher in net terms than the same salary from work.
Will the thresholds change before 2030? The Personal Allowance and the main income tax thresholds are frozen until April 2031, so more people are pulled into higher bands each year as wages rise. This effect, known as fiscal drag, quietly raises the share of pay lost to tax even when rates do not change. The inflation calculator shows how far a frozen threshold falls in real terms over a few years. Always check gov.uk close to the new tax year for the latest confirmed figures.