What tax rates apply to me?
Income tax is payable on taxable income. There are a few different rates of income tax; the rate or rates you pay depend on the amount of your income, the type of your income and where you are resident in the UK. The rates are progressive – the more taxable income you have, the higher the amount of income tax you pay.
Under the UK tax system, generally your ‘earnings’ or ‘non-savings’ income is treated as being taxed first, then any savings income and finally, any dividend income. Your taxable employment income, along with any pension income, taxable state benefits, profits from self-employment or rental income make up your ‘earnings’ or ‘non-savings’ income (from now we will just call this ‘earnings’ income).
What tax rates apply to my earnings income?
You pay income tax on any taxable earnings income that exceeds your tax allowances.
For most people in employment, their only earnings income will be their taxable employment income, including non-cash benefits-in-kind. For more information on what counts as taxable employment income, you should look at the page What income is taxable?.
You are allowed to deduct any allowable expenses that you have incurred in the course of your employment in arriving at your taxable employment income. That might include certain travel expenses and the expenses of using your own car for business purposes, for example.
We explain the tax rates that apply to your taxable employment income in the tax basics section.
If you live in Scotland and are a Scottish taxpayer, you will pay Scottish income tax on your employment income. Different income tax rates and bands apply to your non-savings and non-dividend income. There is more information in our pages on Scottish income tax. UK tax rates and bands apply to your savings and dividend income.
If you live in Wales and are a Welsh taxpayer, you will pay Welsh income tax on your employment income. The rates for Welsh income tax apply to your non-savings and non-dividend income. UK tax rates apply to your savings and dividend income.
Where can I find more information and examples?
If you want more information about what tax rates apply to all your income and examples, go to our page in the tax basics section.
If you want to see the different tax rates and bands, go to our Tax and NIC rates page.