Income tax rates in UK for tax year 2016/2017

For tax year 2016/2017 the UK basic income tax rate was 20%. This increases to 40% for your earnings above £43,000 and to 45% for earnings over £150,000.

Your earnings below £11,000 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 (2016/2017)

Income Tax rate
Up to £11,000 0% Personal allowance
£11,501 to £43,000 20% Basic tax rate
£43,001 to £150,000 40% Higher tax rate
over £150,000 45% Additional tax rate

Example 1: Income tax on earning £35,000

  • The first £11,000 you earned is tax free
  • Remainder (£24,000) is taxed at 20%
  • Your tax bill: £4,800

Example 2: Income tax on earning £75,000

  • The first £11,000 you earned is tax free
  • The remainder up to £43,000 is taxed at 20% (£6,400)
  • What you earn above £43,000 is taxed at 40% (£12,800)
  • Your tax bill: £19,200 (£6,400 + £12,800)

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

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