Marginal Tax Rate Calculator 2026 to 2027
Enter annual taxable income and select the Income Tax region. The calculator compares tax at the current income with tax after an extra £100, showing the tax-only marginal rate and the extra tax on that £100.
Quick answer
Your marginal Income Tax rate is the tax charged on the next part of income, not the average rate across all income. This calculator tests an extra £100 under 2026 to 2027 bands. It excludes National Insurance, student loans, benefits, pension interactions and most reliefs, so total withdrawal can be higher.
Calculator
How to use this calculator
- Enter expected annual taxable income before the extra £100.
- Choose England, Wales or Northern Ireland, or choose Scotland for non-savings, non-dividend income.
- Read the extra tax on £100 and the marginal percentage.
- Run a separate take-home-pay calculation if National Insurance, student loans or benefits matter.
Explanation
What it is
A tax-only marginal-rate estimate showing how much extra Income Tax is charged on the next £100 of annual income under the selected regional bands.
How it works
The tool runs the same Income Tax calculation at two income levels exactly £100 apart. The difference in tax is numerically the percentage marginal rate on that £100.
When to use it
Use it to understand a pay rise, bonus, pension contribution or the Personal Allowance taper before doing a complete take-home-pay calculation.
Limitations
- It excludes National Insurance, student-loan deductions and benefit withdrawal.
- It does not model every relief, taxable benefit, dividend, savings or pension rule.
- The next £100 can cross a band boundary, so the displayed result may blend two rates.
- Scottish bands apply to non-savings, non-dividend income; other income can follow UK-wide rules.
Key terms
- Marginal rate
- The rate applied to the next part of income, rather than tax divided by total income.
- Effective or average rate
- Total tax divided by total income.
- Personal Allowance taper
- The reduction of Personal Allowance by £1 for each £2 of adjusted net income above £100,000.
- Taxable income
- Income remaining after applicable allowances and deductions for Income Tax purposes.
Formula
How we calculate this
Calculate Income Tax at the entered income, calculate it again after adding £100, then divide the additional tax by £100. The result reflects the personal allowance taper where implemented.
Statutory or methodological reference:GOV.UK — Income Tax rates and Personal Allowances.
Formula trace: Apply the 2026 to 2027 Personal Allowance and regional taxable-income bands twice, once at the entered income and once at income plus £100; report the difference as a percentage of £100.
Worked example
At £100,000 in England, Wales or Northern Ireland, an extra £100 can generate £40 of higher-rate tax and remove £50 of Personal Allowance. Taxing that lost allowance at 40% adds £20, so the tax-only marginal rate can be 60%. Confirm the allowance rule at GOV.UK — Income over £100,000.
FAQ
Why can the calculator show 60%?
Above £100,000, the Personal Allowance can be withdrawn while income is also taxed at 40%, creating an effective 60% Income Tax marginal rate in part of the taper range.
Does the result include National Insurance?
No. It is Income Tax only. Employee National Insurance and other deductions can increase the total marginal withdrawal.
Is the Scottish marginal rate different?
It can be. Scotland uses separate bands for non-savings, non-dividend income, while savings and dividend rules are UK-wide.
Why is this not my average tax rate?
The marginal rate applies only to the next £100 tested. The average rate divides total tax by total income.
Can salary sacrifice change the result?
Potentially. A valid arrangement can change taxable pay and other deductions, but this tool does not assess the arrangement or wider consequences.
Common mistakes
- Treating the marginal rate as tax on the whole salary.
- Ignoring National Insurance, student loans or Universal Credit withdrawal.
- Using Scottish bands for savings or dividend income.
- Entering gross income without considering deductions that affect adjusted net income.
Tips
- Test income immediately below and above a known threshold.
- Compare the result with an average-rate and take-home-pay calculation.
- Check adjusted net income where the Personal Allowance taper may apply.
- Retain the source date when using the result in planning.
Related calculators
Related guides
Sources and editorial review
- GOV.UK — Income Tax rates and Personal Allowances
- GOV.UK — Income over £100,000
- Scottish Government — Scottish Income Tax 2026 to 2027
Editorial ownership
Author: FinanceHub UK Editorial Team. Read our editorial policy.
Editorial status: Source checked and selected for indexing. This is an editorial check, not personalised professional advice or regulatory approval.
Sources checked: 3 August 2026. Next scheduled review: 1 March 2027.