UK Take-Home Pay 2026/27: Tax, NI and Student Loan
Quick answer
UK take-home pay for 2026/27 is your gross salary minus Income Tax, Class 1 National Insurance and any student loan repayment. Between £100,000 and £125,140, the £12,570 Personal Allowance is taken away at 50p for every £1 you earn. That pushes the marginal rate (the tax on your next pound) to 62% in England, Wales and Northern Ireland once National Insurance is included, and to 69.5% in Scotland, which has its own, higher Income Tax bands above the Personal Allowance. At £120,000, right in the middle of that band, take-home is £76,157.40 under rUK rates and £71,357.35 under Scottish rates, a £4,800.05 difference from the tax bands alone.
When people talk about UK income tax, they usually quote the headline bands of 20%, 40% and 45%. Those figures understate what really happens to a pound earned between £100,000 and £125,140. A quirk in the way the Personal Allowance is withdrawn pushes the real marginal rate well above any of them.
This guide works through how it happens at £120,000, a salary that sits inside the affected band rather than at either edge. It covers both the rest of the UK and Scotland, which taxes the same band more heavily still.
The Personal Allowance taper, in the middle of the band
Everyone in the UK gets a £12,570 tax-free Personal Allowance for 2026/27. Between £100,000 and £125,140 of income, that allowance is withdrawn at 50p for every £1 earned. So at £120,000, right in the middle of the band, you've already lost £10,000 of the £12,570 allowance, leaving only £2,570 tax-free.
It's the withdrawal that drives the marginal rate up. Each extra pound you earn in this band is taxed at the normal higher rate, and at the same time it removes 50p of tax-free allowance, which then gets taxed as well. Both things happen to the same pound.
What it comes to at £120,000
At £120,000 under the Income Tax bands for the rest of the UK, tax comes to £39,432.00 and National Insurance to £4,410.60, leaving take-home pay of £76,157.40. The marginal rate on the next pound at this salary is 62%: 60% Income Tax because of the taper, plus 2% National Insurance on earnings above the upper earnings limit.
Under Scotland's Income Tax bands, which are higher above the Personal Allowance, the same £120,000 salary produces £44,232.05 of tax. That leaves take-home of £71,357.35, which is £4,800.05 less than the rUK figure on an identical salary. Scotland's marginal rate in this band is 69.5%: a 67.5% Income Tax rate (1.5× Scotland's 45% advanced rate) plus the same 2% National Insurance.
It's worth running your own salary through the UK Take-Home Pay Calculator, because the taper doesn't affect take-home evenly across £100,000-£125,140. A salary nearer either edge of the band gives a different result from the £120,000 example here.
- A pension contribution big enough to bring your adjusted net income back under £100,000 avoids the taper on that slice of income completely, which is why extra pension contributions are especially rewarding in this band.
- £125,140 isn't a random cut-off. It's exactly £100,000 plus twice the £12,570 allowance, the point where the taper has taken the whole allowance away.
- National Insurance and the Personal Allowance itself are the same across the whole UK. Only the Income Tax bands above the allowance differ between nations.
Frequently Asked Questions
Why is the marginal rate in this band higher than the highest tax bracket?
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Because two things happen to the same pound of income: it's taxed at the ordinary higher rate, and it also takes away 50p of tax-free Personal Allowance, which is then taxed too. Neither effect reaches 60% on its own, but together they do.
Does this band apply the same way in Scotland?
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The same £100,000-£125,140 taper applies across the UK. Scotland's Income Tax bands above the Personal Allowance are higher than in the rest of the UK, though, so the same taper produces a higher combined marginal rate there: 69.5% against 62%.
How can someone in this band reduce their effective tax rate?
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A pension contribution (or a Gift Aid donation) that brings adjusted net income back under £100,000 avoids the taper on that slice of income. That's why this particular band rewards extra pension contributions more than almost any other salary level.
Does student loan repayment add to this marginal rate?
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Yes, if you have a student loan. Repayments are a percentage of income above your plan's threshold and come on top of Income Tax and National Insurance, so the marginal rate in this band is higher still while you're repaying.