Income tax calculator UK

Example 1: Earning £60,000

If you earn £60,000, you don’t pay 40% on the whole amount. Here’s how it breaks down:

• £12,570 = tax-free (Personal Allowance)
• £37,700 taxed at 20% = £7,540
• £9,730 taxed at 40% = £3,892
• Total income tax: £11,432

Example 2: Earning £120,000 (the Personal Allowance taper)

At this level, your Personal Allowance is reduced. For every £2 you earn over £100,000, you lose £1 of your allowance. So at £120,000, your allowance is reduced by £10,000 – leaving you with just £2,570 tax-free. Here’s how it breaks down:

• £2,570 = tax-free (reduced allowance)
• £37,700 taxed at 20% = £7,540
• £79,730 taxed at 40% = £31,892
• Total income tax: £39,432

This creates an effective marginal tax rate of 60% on income between £100,000 and £125,140 when you factor in the lost allowance – sometimes called the “60% tax trap”.

What about expenses?

When you’re self-employed, you can deduct your business spending from your overall yearly earnings so that you’re only paying tax on your profits. This business spending is known as your expenses.

To deduct expenses, it’s essential to keep a record of what you spend, on what, and when. Take a look at our guide on why it’s important to keep receipts. To use the Taxfix service, we don’t need to see your receipts, but we will need to see your records, whether in a spreadsheet or downloaded from the accounting software you use.

Can I use this as a Self Assessment tax calculator?

Yes. If you’re calculating your Self Assessment tax bill, just switch to the self-employed option in the Your Situation section. Based on your income, we’ll work out the income tax and National Insurance contributions you owe on your self-employed profits.

If you’re both employed and self-employed, or you have other income sources such as investments, rental income, or a freelance project, and you want to work out your total tax liability, check out our other tax calculators.

And remember: unlike PAYE, where tax is deducted from your salary automatically, Self Assessment tax bills are paid manually. You’ll need to submit and pay both your income tax and National Insurance by 31 January following the end of the tax year.

When you need more than a calculator

A calculator tells you what you owe. But if your tax situation is more involved, getting it right and making sure you’re not overpaying takes a bit more than a number on a screen. Here are some situations where expert advice makes a real difference:

• Multiple income sources: salary plus rental income, dividends, or capital gains
• High earnings: over £100,000, where the Personal Allowance taper applies
• Property income: if your gross rental income exceeds £50,000, you’re already required to use Making Tax Digital for Income Tax from April 2026. Below that threshold, the deadline is coming, so it’s worth getting prepared now.
• Share schemes or stock options: RSUs, EMI, SAYE, or share disposals [Add internal link to “Employees with shares hub” once page is live] 
• Child Benefit and high income: the High Income Child Benefit Charge applies if either partner earns over £60,000
• Foreign income or assets: rental income abroad, overseas pensions, or foreign dividends
• Dividend income: rates rose in April 2026, so your bill may be higher than you expect

What a Taxfix accountant will do for you

• Review your full tax position across all income sources
• Identify reliefs and allowances you’re entitled to (pension contributions, charitable giving, etc.)
• File your return accurately and on time
• Provide a clear breakdown of what you owe and why
• Handle any HMRC queries or amendments

FAQ: Income tax calculator UK

How much tax will I pay on £50,000 in the UK?

For the 2026/27 tax year, you’ll pay an income tax bill of £7,486 and National Insurance of around £3,016, leaving you with approximately £39,498 take-home pay. Use the calculator above to check your income tax and get a precise figure based on your exact circumstances.

How is income tax calculated in the UK?

Income tax is calculated progressively. You only pay each rate on the portion of income that falls within that band, not on your total earnings. Your Personal Allowance is deducted first. What’s left is taxed at 20%, 40%, or 45% depending on which band it falls into. You never pay the higher rate on your entire income.

Do I pay tax if I earn under £12,570?

No. The Personal Allowance for 2026/27 is £12,570, so you won’t pay any income tax below this amount. You may still build up a National Insurance record even if no contributions are due, which helps protect your State Pension entitlement.

What is the 60% tax trap for high earners?

It refers to the effective marginal rate on income between £100,000 and £125,140, where you lose £1 of your Personal Allowance for every £2 you earn, creating a combined rate of 60%. Pension contributions are one of the most effective ways to bring your income below £100,000 and avoid it. A Taxfix accountant can help you model the options.

Can I use this calculator if I’m self-employed?

Yes. Select the self-employed option, enter your income and expenses, and the calculator will estimate your income tax and Class 4 National Insurance based on your taxable profit. If you’re both employed and self-employed, check our other calculators for a combined view.

Do I need to file a tax return if I only earn a salary?

Usually not. If tax is deducted through PAYE and you have no other income, you don’t normally need to file a Self Assessment return. You will need to file one if you earn over £100,000, receive dividend or savings income above certain thresholds, or are liable for the High Income Child Benefit Charge.

This article provides general information only and is not personalised tax advice.