What is the 40% Tax Bracket?
What is the 40% Tax Bracket?
The 40% tax bracket is the higher rate of Income Tax. In England, Wales and Northern Ireland, someone receiving the full Personal Allowance generally starts paying 40% Income Tax when their income exceeds £50,270.
Only the portion of your income that falls within the higher-rate band is taxed at 40% — not your entire income.
So earning £51,000 does not mean your whole salary is taxed at 40%. Assuming the full Personal Allowance, only £730 falls into the 40% band.
What is the 40% tax bracket?
The 40% tax bracket is the higher rate of Income Tax. For the 2026/27 tax year, a taxpayer in England, Wales or Northern Ireland who receives the full £12,570 Personal Allowance generally starts paying 40% Income Tax when their income exceeds £50,270.
Crucially, earning more than £50,270 does not mean that all your income is taxed at 40%. Only the part falling within the higher-rate band is taxed at 40%.
*Assuming the full standard Personal Allowance and the main Income Tax rates applying in England, Wales and Northern Ireland. Scottish rates and bands differ.
How does the 40% tax bracket work?
UK Income Tax is progressive. Your income is divided into bands and each band can be taxed at a different rate. Moving into the 40% tax bracket therefore does not cause your entire salary or income to suddenly be taxed at 40%.
For someone receiving the standard Personal Allowance in England, Wales or Northern Ireland, the 2026/27 bands can be illustrated as follows.
| Income band | 2026/27 income | Income Tax rate |
|---|---|---|
| Personal Allowance | £0 – £12,570 | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
The commonly quoted £50,270 higher-rate threshold assumes you are entitled to the full £12,570 Personal Allowance. The underlying basic-rate band is £37,700 of taxable income after allowances. Your individual position can differ if your Personal Allowance or tax code is adjusted.
How much 40% tax do you pay on a £60,000 salary?
Assume you earn a salary of £60,000, receive the full Personal Allowance and have no other taxable income or relevant deductions. Your Income Tax is split across the bands rather than applying one rate to your entire salary.
£60,000 salary · 2026/27 illustrative calculation
Only £9,730 of the £60,000 salary is taxed at 40%.
Do you pay 40% tax on everything over £50,000?
No. For 2026/27, the standard higher-rate threshold is £50,270, not £50,000, for someone entitled to the full Personal Allowance in England, Wales or Northern Ireland.
More importantly, crossing that threshold does not make all your income subject to 40% tax. It means the next part of your taxable income enters the higher-rate band.
£50,000 income
Assuming the full Personal Allowance and no other relevant income, none of this income reaches the 40% band.
£60,000 income
£9,730 falls above the standard £50,270 threshold and is therefore within the 40% higher-rate band.
Multiple income sources
Salary is not the only consideration. Taxable property income, savings, dividends, pensions and other income can affect your overall tax position.
What happens to the 40% tax bracket above £100,000?
The £100,000 Personal Allowance tax trap
The position becomes more complicated once your adjusted net income exceeds £100,000.
Your £12,570 Personal Allowance is reduced by £1 for every £2 of adjusted net income above £100,000. This means the standard Personal Allowance is completely lost once adjusted net income reaches £125,140.
For income subject to the 40% rate, the interaction between the 40% higher rate and the loss of Personal Allowance can create an effective marginal Income Tax rate of 60% on the affected slice of income between £100,000 and £125,140.
Read our detailed guide to the UK Personal Allowance for more information about adjusted net income and the £100,000 taper.
Marginal tax rate vs effective tax rate
Two different percentages are often confused when discussing the 40% tax bracket.
The Income Tax rate applying to the next portion of income you receive. If that income falls within the higher-rate band, the marginal Income Tax rate may be 40%.
Your total Income Tax divided by your total income. This can be much lower than 40% because some income may be tax-free or taxed at lower rates.
National Insurance, student loan repayments and other deductions are separate from the 40% Income Tax rate and can affect how much of an additional £1 of earnings you actually keep.
Does the 40% tax bracket apply in Scotland?
Scotland has different Income Tax rates and bands
The £50,270 threshold and 40% higher rate described above apply to the main Income Tax rates for taxpayers in England, Wales and Northern Ireland.
Scottish taxpayers have separate rates and bands for non-savings, non-dividend income. For 2026/27, Scotland does not simply use the same 20%, 40% and 45% structure shown above.
Your Scottish taxpayer status is based on the relevant statutory rules and is not simply determined by where your employer is located.
Why are more people becoming higher-rate taxpayers?
One reason is fiscal drag. When tax thresholds remain unchanged while salaries and other income rise, more income can move into higher tax bands even though the tax rate itself has not increased.
The standard Personal Allowance of £12,570 and basic-rate limit of £37,700 are currently set to remain at those levels through 2030/31. If earnings rise during that period, more taxpayers may therefore find some of their income entering the higher-rate band.
Can you reduce the amount of income taxed at 40%?
Depending on your circumstances, legitimate tax reliefs and planning can affect how much of your income is exposed to higher-rate tax. The correct treatment depends on the type of income and the relief involved.
Qualifying pension contributions can provide higher-rate tax relief. How the relief is received depends on whether the scheme uses relief at source, net pay or another arrangement.
With relief-at-source pensions, higher-rate taxpayers may need to claim additional tax relief from HMRC rather than assuming all relief has been given automatically.
Qualifying Gift Aid donations can extend the basic-rate band and can also be relevant when calculating adjusted net income.
Self-employed taxpayers and landlords should ensure legitimate deductible expenses and available reliefs are correctly claimed.
Read our Higher Rate Tax Relief on Pension Contributions guide for a detailed explanation of 40% pension tax relief and how to claim it.
40% tax bracket FAQs
What salary puts you in the 40% tax bracket?
Do I pay 40% tax if I earn £50,000?
Do I pay 40% tax on my whole salary once I earn over £50,270?
How much tax do I pay if I earn £60,000?
What is the 40% tax threshold for 2026/27?
Is the 40% tax threshold based only on salary?
Can pension contributions help if I pay 40% tax?
Why is there a 60% tax trap above £100,000?
Does Scotland have a 40% tax bracket?
What is the 40% tax bracket? Key takeaways
It is the main higher rate of Income Tax in England, Wales and Northern Ireland.
For 2026/27, 40% generally starts at £50,271 where the full £12,570 Personal Allowance is available.
Only the portion falling within the higher-rate band is subject to the 40% rate.
The Personal Allowance starts to taper once adjusted net income exceeds £100,000.
Need help with your higher-rate tax position?
If you have income from several sources, pay higher-rate tax or need help ensuring the correct reliefs are included on your Self Assessment, The Online Accountants can help.
View Self Assessment Service →Tax information is based on the 2026/27 tax year and is provided for general guidance only. Individual circumstances can affect the tax treatment. Scottish Income Tax rates and bands differ.