Employee
Employer cost
Frequently asked questions
What is the tax-free Personal Allowance?
£12,570 a year. Above £100,000 of income it falls by £1 for every £2, and disappears completely at £125,140.
What is National Insurance?
A contribution towards the State Pension and benefits. In 2026/27 you pay 8% on earnings between £12,570 and £50,270 a year, and 2% above that. Your employer pays 15% above £5,000.
How do I know which pension scheme I am in?
Check your payslip or pension letter. If it says "salary sacrifice", your pay is reduced before tax. If it says "relief at source", or you are with NEST, you usually pay 80% and HMRC adds 20%. If unsure, ask your payroll team.
Is tax different in Scotland?
Yes. Scotland has six income tax bands (19% to 48%). National Insurance is the same across the UK. Tick "I live in Scotland".
Which student loan plan am I on?
Plan 1: you started in England or Wales before September 2012, or in Northern Ireland. Plan 2: England or Wales from September 2012 to July 2023. Plan 4: Scotland. Plan 5: England from August 2023. Your plan is shown in your Student Loans Company account.
Rules and legal basis
| Income above the £12,570 Personal Allowance | England, Wales, NI |
|---|---|
| £0 – £37,700 | 20% |
| £37,701 – £125,140 | 40% |
| over £125,140 | 45% |
| Scotland | Rate |
|---|---|
| £0 – £3,967 | 19% |
| £3,968 – £16,956 | 20% |
| £16,957 – £31,092 | 21% |
| £31,093 – £62,430 | 42% |
| £62,431 – £125,140 | 45% |
| over £125,140 | 48% |
| National Insurance | Rate |
|---|---|
| £12,570 – £50,270 | 8% |
| over £50,270 | 2% |
| Employer, over £5,000 | 15% |
Tax year 6 April 2026 – 5 April 2027. The Personal Allowance falls by £1 for every £2 above £100,000. Student loans: 9% above the threshold (Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000); postgraduate loan 6% above £21,000. Pension: under relief at source you pay 80% of your contribution from net pay and HMRC adds 20%; under a net pay arrangement it comes off before tax but not before National Insurance; under salary sacrifice your pay is reduced before tax, National Insurance and student loan. Higher-rate taxpayers can claim extra relief through Self Assessment. Qualifying earnings 2026/27: £6,240–£50,270. Not covered: non-standard tax codes, benefits in kind.
Sources: GOV.UK – rates and thresholds 2026/27 · GOV.UK – auto-enrolment 2026/27