UK Marginal Tax Rate Calculator
Your marginal rate is the tax you pay on the next pound of income — not the average rate across everything you earn.
It depends on where the extra income sits in the tax bands, and whether it comes as salary, self-employed profit, dividends or savings interest. Enter your current income and the extra amount to see the true cost.
How the calculation works
We believe numbers should be transparent. Here is the formula behind this calculator.
Worked example
Worked example: a £5,000 bonus on top of a £60,000 salary in 2026/27
Examples at common levels
See how the numbers change at typical input levels, using the updated for tax year 2026/27 rates.
| Scenario | Marginal tax rate on the extra income | Total extra tax | Income Tax on the extra income | National Insurance on the extra income | Your current tax band | Effective tax rate on your current income |
|---|---|---|---|---|---|---|
| £50,000 salary + £5,000 bonus | 41.24% | £2,062.20 | £1,946.00 | £116.20 | Basic rate (20%) | 14.97% |
| £50,000 salary + £5,000 dividends | 30.38% | £1,518.75 | £0.00 | £1,518.75 | Basic rate (20%) | 14.97% |
| £60,000 salary + £5,000 self-employed profit | 42.00% | £2,100.00 | £2,000.00 | £100.00 | Higher rate (40%) | 19.05% |
| £150,000 salary + £5,000 savings interest | 45.00% | £2,250.00 | £2,250.00 | Additional rate (45%) | Additional rate (45%) | 35.80% |
Important assumptions
- Employee National Insurance on the extra income assumes you are below the Upper Earnings Limit (£50,270) unless stated otherwise.
- Self-employed extra income is taxed with Class 4 National Insurance (6% up to the limit, 2% above) but no Class 2.
- Dividends use your unused dividend allowance first; the rate shown assumes the allowance has not been used elsewhere.
- Savings interest is assumed to be above the Personal Savings Allowance, so the full marginal Income Tax rate applies.
- Excludes Student Loan repayments, which add 9% (6% for postgraduate) to the marginal rate for salary income.
Rates & official sources
Every calculation is based on the official rates and rules published by GOV.UK and HMRC.
Frequently asked questions
What is the marginal tax rate?
The marginal rate is the tax you pay on the next pound of income. It is usually higher than your effective (average) rate because part of your income is covered by allowances and lower bands.
Why is my marginal rate higher than my effective rate?
Your effective rate averages tax over all your income, including the tax-free allowance and basic-rate slice. The marginal rate only looks at the tax on the next pound, which sits in your highest band.
Does National Insurance count as part of my marginal rate?
Yes, for salary income. Employee NI adds 8% up to the Upper Earnings Limit and 2% above it, so a higher-rate employee on salary faces 42% or 47% marginal rates before student loan repayments.
Are dividends taxed at a lower marginal rate?
Yes. Dividend tax is 8.75% in the basic band, 33.75% in the higher band and 39.35% in the additional band, with a £500 dividend allowance — lower than the equivalent salary marginal rates.
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View calculatorRelated guides
New to the topic? Read a plain-English guide on salary & tax, with worked examples and tips.
How UK Income Tax works
The tax-free allowance, rate bands and how PAYE takes tax from your pay.
Read the guide TaxPAYE explained
How pay as you earn collects Income Tax and NI from your salary.
Read the guide TaxUnderstanding tax bands
Basic, higher and additional rate explained with worked examples.
Read the guide TaxHow to read a payslip
Every line on your pay slip decoded — payments, deductions, year-to-date, and why a bonus month looks different.
Read the guide TaxUK tax rates and allowances 2026/27
Every UK tax rate and allowance for the 2026/27 tax year in one place — income tax, National Insurance, VAT, dividends, corporation tax, student loans and more.
Read the guide TaxHigh Income Child Benefit Charge explained
How the High Income Child Benefit Charge works — the £60,000 threshold, the 1% clawback and what you repay.
Read the guide TaxPension tax relief explained
How pension tax relief works — 20% added at source, extra relief for higher and additional-rate taxpayers, and the annual allowance.
Read the guideThese calculations are estimates for guidance only and are not professional financial, tax or legal advice. UK rates and rules change, so always verify important figures with official GOV.UK / HMRC information or speak to a qualified professional. See our full disclaimer.