UK 40% Tax Bracket (2026/27)
The 40% higher-rate Income Tax band starts at £50,270 of gross income for 2026/27. Combined with 2% NI on the same band the effective marginal rate is 42%. The threshold has been frozen since April 2021 - meaning real wage growth has been pulling more people into the higher band through "fiscal drag".
Take-home as you cross the threshold
| Gross salary | Annual take-home | Monthly |
|---|---|---|
| £50,000 | £39,520 | £3,293 |
| £55,000 | £42,457 | £3,538 |
| £60,000 | £45,357 | £3,780 |
| £70,000 | £51,157 | £4,263 |
| £80,000 | £56,957 | £4,746 |
| £90,000 | £62,757 | £5,230 |
| £99,000 | £67,977 | £5,665 |
Combined marginal rates by band
- £0 to £12,570 (Personal Allowance): 0% Income Tax + 0% NI = 0%.
- £12,571 to £50,270 (Basic Rate): 20% IT + 8% NI = 28%.
- £50,271 to £100,000 (Higher Rate): 40% IT + 2% NI = 42%.
- £100,001 to £125,140 (Higher Rate + PA taper): 40% + 2% + 20% effective = 62%.
- Above £125,140 (Additional Rate): 45% + 2% = 47%.
Frequently asked questions
- When does the 40% tax bracket start in the UK?
- The 40% higher-rate Income Tax band starts at £50,270 of gross income for 2026/27 (the £37,700 basic-rate band on top of the £12,570 Personal Allowance). Above £50,270 every additional pound is taxed at 40% Income Tax plus 2% National Insurance, giving a combined 42% marginal rate. The threshold has been frozen since April 2021.
- Why is the effective marginal rate 42% not 40%?
- The 40% headline rate is Income Tax only. UK earners above £50,270 also pay Class 1 employee National Insurance at 2% on the same band. The combined marginal rate on the higher-rate band is therefore 42%. Below £50,270 NI is 8%, so basic-rate earners pay 28% combined (20% IT + 8% NI) - actually a higher combined rate than the gap above suggests.
- Is the 40% band different in Scotland?
- Yes. Scotland has its own Income Tax bands above the UK Personal Allowance. Scottish Higher Rate is 42% (not 40%) and starts at £43,663 - lower than the £50,270 rest-of-UK threshold. Above the Scottish Higher Rate threshold to £75,000 the rate is 42%; from £75,001 to £125,140 the Scottish Advanced Rate is 45%; above £125,140 the Scottish Top Rate is 48%.
- When does the 40% band end?
- The 40% higher rate applies on income from £50,271 to £125,140. At £125,140 the personal allowance is fully tapered away and the 45% Additional Rate kicks in. The band £100,000 to £125,140 also triggers the Personal Allowance taper which adds an effective 20% to the marginal rate, giving a 62% effective combined rate in that window - the highest single-band marginal in the UK.
- How do I avoid paying 40% on a pay rise?
- Three legitimate routes: (1) salary-sacrifice the marginal pounds into a workplace pension - the £1 sacrificed avoids 40% IT + 2% NI; (2) Gift Aid grossed-up charitable donations reduce adjusted net income and so reduce the amount in the 40% band; (3) move some income into a Personal Savings Allowance or Dividend Allowance which have their own bands. Note none of these reduce the marginal rate on income you do take home - they just shift income out of the higher band.