Key facts
- The Personal Allowance remains at £12,570 for 2026/27 (frozen since 2021/22).
- The basic rate band runs from £12,571 to £50,270, with higher rate at 40% and additional rate at 45% above £125,140.
- The employee NI Primary Threshold is £12,570 per year; the employer Secondary Threshold is £5,000.
- The employer NI rate is 15% (increased from 13.8% in April 2025).
- Statutory payment rates (SMP, SPP, SAP, ShPP) are £194.32 per week; SSP is the lower of £123.25 per week or 80% of average weekly earnings, payable from day one (from 6 April 2026).
Income Tax Rates and Bands
The following Income Tax rates and bands apply to England, Wales, and Northern Ireland for 2026/27. Scottish rates differ and are shown separately below.[2]
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | £0 – £12,570 | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
The Personal Allowance reduces by £1 for every £2 of income above £100,000, reaching zero at £125,140. This creates an effective marginal rate of 60% for income between £100,000 and £125,140.
Scottish Income Tax Rates 2026/27
Scottish taxpayers (identified by tax codes starting with “S”) pay different rates:
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | £0 – £12,570 | 0% |
| Starter rate | £12,571 – £16,537 | 19% |
| Basic rate | £16,538 – £29,526 | 20% |
| Intermediate rate | £29,527 – £43,662 | 21% |
| Higher rate | £43,663 – £75,000 | 42% |
| Advanced rate | £75,001 – £125,140 | 45% |
| Top rate | Over £125,140 | 48% |
National Insurance Thresholds and Rates
The following Class 1 NI thresholds and rates apply for 2026/27:[3]
| Threshold / Limit | Annual | Monthly | Weekly |
|---|---|---|---|
| Lower Earnings Limit (LEL) | £6,708 | £559 | £129 |
| Primary Threshold (PT) — employee | £12,570 | £1,048 | £242 |
| Secondary Threshold (ST) — employer | £5,000 | £417 | £96 |
| Upper Earnings Limit (UEL) | £50,270 | £4,189 | £967 |
NI Rates (Category A — standard)
| Contributor | Earnings Band | Rate |
|---|---|---|
| Employee | PT to UEL (£12,570 – £50,270) | 8% |
| Employee | Above UEL | 2% |
| Employer | Above ST (£5,000+) | 15% |
Key point: The Employment Allowance for 2026/27 is £10,500. This allows eligible employers to reduce their employer NI liability by up to £10,500 per year. From April 2025, the £100,000 previous-year liability restriction was removed, so employers of all sizes can now claim — but some exclusions still apply. Most notably, a company cannot claim if its only employee paid above the Class 1 Secondary Threshold is also a director (the single-director company rule). Employers of personal or household staff (other than care or support workers) and earnings within the off-payroll working (IR35) rules are also excluded.[1]
Student Loan Thresholds
| Plan | Annual Threshold | Monthly Threshold | Deduction Rate |
|---|---|---|---|
| Plan 1 | £26,900 | £2,241 | 9% |
| Plan 2 | £29,385 | £2,448 | 9% |
| Plan 4 | £33,795 | £2,816 | 9% |
| Plan 5 | £25,000 | £2,083 | 9% |
| Postgraduate Loan | £21,000 | £1,750 | 6% |
Statutory Payment Rates
| Payment | Weekly Rate | Duration / Notes |
|---|---|---|
| Statutory Sick Pay (SSP) | £123.25 (or 80% of AWE if lower) | Up to 28 weeks, payable from day one (waiting days abolished from 6 April 2026) |
| Statutory Maternity Pay (SMP) | 90% of AWE (weeks 1–6), then £194.32 | Up to 39 weeks |
| Statutory Paternity Pay (SPP) | £194.32 (or 90% of AWE if lower) | Up to 2 weeks |
| Statutory Adoption Pay (SAP) | 90% of AWE (weeks 1–6), then £194.32 | Up to 39 weeks |
| Shared Parental Pay (ShPP) | £194.32 (or 90% of AWE if lower) | Up to 37 weeks |
The Lower Earnings Limit for statutory family payment eligibility (SMP, SPP, SAP, ShPP) is £129 per week (£6,708 per year). SSP no longer has a minimum earnings test — the Lower Earnings Limit condition was removed from 6 April 2026.
Other Key Thresholds
| Item | 2026/27 Amount |
|---|---|
| Auto-enrolment earnings trigger | £10,000/year |
| Auto-enrolment qualifying earnings band | £6,240 – £50,270 |
| Statutory redundancy pay — weekly cap | £751 |
| Statutory redundancy pay — max service | 20 years |
| Benefit in kind: interest-free loan threshold | £10,000 |
| Official rate of interest (beneficial loans) | 3.75% |
| Apprentice upper secondary threshold (under 25) | £50,270/year (£967/week) |
Tip: Bookmark this page for quick reference throughout the tax year. Always verify the rates against the official HMRC publication (GOV.UK rates and thresholds) when setting up your payroll software for a new tax year.
Frequently Asked Questions
Why has the Personal Allowance been frozen since 2021/22?
The UK government announced a freeze on the Personal Allowance and higher rate threshold from 2021/22 to 2027/28. Because wages typically rise each year while the thresholds stay the same, more people are pulled into higher tax brackets — a process known as “fiscal drag.” This raises additional tax revenue without formally increasing tax rates.
What changed with employer NI from April 2025?
From April 2025, the employer NI rate increased from 13.8% to 15%, and the Secondary Threshold (the point at which employer NI starts) was reduced from £9,100 to £5,000. To offset the impact on small businesses, the Employment Allowance was increased from £5,000 to £10,500, and the £100,000 previous-year liability restriction was removed so employers of all sizes can claim it. One notable exclusion remains: a company whose only employee paid above the Secondary Threshold is also a director cannot claim.
Do Scottish taxpayers have different PAYE rates?
Yes. Scottish taxpayers have their own income tax rates and bands set by the Scottish Parliament (the Scottish Rate of Income Tax, or SRIT). In 2026/27, Scotland has six bands: Starter (19%), Basic (20%), Intermediate (21%), Higher (42%), Advanced (45%), and Top (48%). Scottish tax codes begin with “S” (e.g. S1257L). NI rates remain UK-wide.
Where can I find the official HMRC rates?
HMRC publishes the official rates and thresholds for each tax year on GOV.UK under “Rates and thresholds for employers.” This is updated annually, usually in late February or March before the new tax year begins. Your payroll software provider will also update their system with the new figures.
Further Reading
- Statutory Deductions (Tax, NI, Student Loan) — how these rates are applied in practice
- How Tax Codes Work — linking the Personal Allowance to tax codes
- Key Payroll Dates Calendar — all the important dates for the 2026/27 tax year
- Payroll Glossary — definitions of the terms used in this article
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