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EnEnPrefer a visual walkthrough? Watch our step-by-step video guide to see exactly how to calculate income tax, understand tax bands, and interpret your results using the UK income tax calculator.
Income Tax is the tax you pay on your earnings and other income throughout the tax year. It applies to money you earn from employment, self-employment, pensions, rental properties, and certain benefits.
Income Tax is charged on most types of income including:
For the 2025/26 tax year, most individuals have a Personal Allowance of £12,570, meaning income up to this amount is tax-free.
Some income is exempt from UK income tax, including income earned within ISAs, Premium Bond prizes, tax-free National Savings products, certain benefits, and the first £1,000 of self-employment or property income under the trading allowance.
Understanding the current UK income tax rates is essential before you calculate your liability. Income Tax is charged in bands, and the rate you pay depends on how much you earn.
| Tax Band | Income Range | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Important notes: Your Personal Allowance reduces by £1 for every £2 earned over £100,000. Scotland has different income tax rates for non-savings, non-dividend income. Always use current rates when filing your return.
Add up all income sources for the tax year (6 April to 5 April).
Total Income = Salary + Self-Employment + Rental + Other Income
Deduct business expenses such as office costs, travel, equipment, professional fees, and insurance to reduce taxable profits.
Deduct £12,570 from your income. This amount is tax-free.
Taxable Income = Total Income – Personal Allowance
Income is taxed progressively across tax bands at 20%, 40%, and 45%.
If you earn £60,000:
Personal Allowance: £12,570
Taxable Income: £47,430
Total Income Tax: £11,432
If you’re employed, Income Tax is deducted automatically through PAYE. You only need to act if you have additional untaxed income.
If you’re self-employed, you must register for Self Assessment, submit your return by 31 January, and pay any Income Tax and National Insurance owed by that date.
If you have multiple income sources, including rental income or side income over £1,000, you’ll likely need to complete a Self Assessment return.
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