UK Savings Interest Tax Calculator
Interest on savings and bank accounts is taxable income, but most people pay nothing thanks to the Personal Savings Allowance: £1,000 of interest is tax-free for basic-rate taxpayers, £500 for higher-rate and £0 for additional-rate. Interest above your allowance is taxed at your highest Income Tax rate.
Enter your savings interest and other income to see exactly what you owe.
How the calculation works
We believe numbers should be transparent. Here is the formula behind this calculator.
Worked example
Worked example: £1,500 interest 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 | Tax on your savings interest | Interest you keep | Savings interest | Taxed at 20% | Taxed at 40% | Taxed at 45% | Effective tax rate |
|---|---|---|---|---|---|---|---|
| £1,500 interest, £20,000 salary £1,000 PSA, rest at 20% | £100.00 | £1,400.00 | £1,500.00 | £100.00 | £0.00 | £0.00 | 6.7% |
| £800 interest, £55,000 salary £500 PSA, rest at 40% | £120.00 | £680.00 | £800.00 | £0.00 | £120.00 | £0.00 | 15.0% |
| £2,000 interest, £30,000 salary Basic rate | £200.00 | £1,800.00 | £2,000.00 | £200.00 | £0.00 | £0.00 | 10.0% |
| £1,200 interest, £140,000 salary No PSA — taxed at 45% | £540.00 | £660.00 | £1,200.00 | £0.00 | £0.00 | £540.00 | 45.0% |
Important assumptions
- Uses England, Wales and Northern Ireland income tax rates.
- The Personal Savings Allowance depends on your highest income tax band: £1,000 basic, £500 higher, £0 additional.
- The first £5,000 of interest is tax-free when your total income is below £17,570 (the starting rate) — not modelled here.
- ISA interest is always tax-free and is not included.
Rates & official sources
Every calculation is based on the official rates and rules published by GOV.UK and HMRC.
Frequently asked questions
How much tax do I pay on savings interest?
Nothing up to your Personal Savings Allowance (£1,000 for basic-rate, £500 for higher-rate, £0 for additional-rate taxpayers). Above it you pay 20%, 40% or 45% depending on your income tax band.
Do I need to tell HMRC about my savings interest?
Usually no. Banks report interest to HMRC and most people pay the right tax automatically through their tax code. If you complete a Self Assessment return, include it there.
Is my interest always taxed at 45% if I earn over £125,140?
Yes. Once your total income exceeds £125,140 you are an additional-rate taxpayer, so the Personal Savings Allowance is £0 and all interest above the starting-rate band is taxed at 45%.
What is the starting rate for savings?
If your other income is below £17,570 you also get a 0% starting-rate band of up to £5,000 for savings interest. This calculator does not model it, so basic-rate savers on low incomes may pay even less than shown.
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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.