Income tax rates in UK for tax year 2015/2016

For tax year 2015/2016 the UK basic income tax rate was 20%. This increases to 40% for your earnings above £42,385 and to 45% for earnings over £150,000.

Your earnings below £10,600 are tax free. This is called the personal allowance. However for every £2 you earn over £100,000 this allowance is reduced by £1.

UK income tax bands and rates (2015/2016)

Income Tax rate
Up to £11,000 0% Personal allowance
£11,501 to £42,385 20% Basic tax rate
£442,386 to £150,000 40% Higher tax rate
over £150,000 45% Additional tax rate

Example 1: Income tax on earning £35,000

  • The first £10,600 you earned is tax free
  • Remainder (£23,150) is taxed at 20%
  • Your tax bill: £4,630

Example 2: Income tax on earning £75,000

  • The first £10,600 you earned is tax free
  • The remainder up to £42,850 is taxed at 20% (£6,900)
  • What you earn above £42,850 is taxed at 40% (£11,460)
  • Your tax bill: £18,360 (£6,900 + £11,460)

If you need to quickly see how much tax you need to pay view our income tax calculator.

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