UK income tax bands (2024-25)

  • Personal Allowance: £12,570 (no tax)
  • Basic rate (20%): £12,571–£50,270
  • Higher rate (40%): £50,271–£125,140
  • Additional rate (45%): above £125,140

The Personal Allowance is reduced by £1 for every £2 earned over £100,000, making the effective marginal rate 60% between £100,000–£125,140.

National Insurance (2024-25)

Employees pay National Insurance contributions:

  • 8% on earnings between £12,570–£50,270
  • 2% above £50,270

(Rates reduced from 10%/2% effective January 2024)

PAYE — Pay As You Earn

Most UK employees pay tax through PAYE — deducted automatically by employers. If you have multiple income sources, rental income, or self-employment income, you may need to submit a Self Assessment tax return.