How it works
2024/25 tax year: key rates and thresholds
The 2024/25 UK tax year ran from 6 April 2024 to 5 April 2025. The Chancellor froze all main Income Tax thresholds for the fourth consecutive year. The single significant rate change was a cut to employee National Insurance.
| Tax Component | 2024/25 Rate | Threshold |
|---|---|---|
| Personal Allowance | 0% | £0 – £12,570 |
| Basic rate Income Tax | 20% | £12,571 – £50,270 |
| Higher rate Income Tax | 40% | £50,271 – £125,140 |
| Additional rate Income Tax | 45% | Over £125,140 |
| Employee NI (main rate) | 8% | £12,570 – £50,270 |
| Employee NI (upper rate) | 2% | Over £50,270 |
The National Insurance cut from April 2024
The most significant payroll change in 2024/25 was the 2 percentage point cut to employee Class 1 National Insurance, from 10% to 8%, effective from 6 April 2024. This followed an earlier cut from 12% to 10% that took effect on 6 January 2024 (mid-way through the 2023/24 tax year).
The effect on a £35,000 salary: employee NI fell by approximately £450 a year compared with the rate that applied before January 2024.
| Salary | NI at 12% (pre-Jan 2024) | NI at 10% (Jan–Apr 2024) | NI at 8% (from Apr 2024) |
|---|---|---|---|
| £25,000 | £1,491.60 | £1,243.00 | £994.40 |
| £35,000 | £2,691.60 | £2,243.00 | £1,794.40 |
| £50,000 | £4,521.60 | £3,768.00 | £3,014.40 |
| £60,000 | £4,721.60 | £3,934.67 | £3,210.60 |
Scottish Income Tax 2024/25
Scotland made several changes to its Income Tax rates for 2024/25, widening the gap with the rest of the UK for middle and higher earners:
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter rate | £12,571 – £14,876 | 19% |
| Basic rate | £14,877 – £26,561 | 20% |
| Intermediate rate | £26,562 – £43,662 | 21% |
| Higher rate | £43,663 – £75,000 | 42% |
| Advanced rate | £75,001 – £125,140 | 45% |
| Top rate | Over £125,140 | 48% |
Worked example: £40,000 in 2024/25 (England)
Complete PAYE calculation for a £40,000 salary in England for 2024/25, with no pension or student loan:
- Taxable income: £40,000 − £12,570 = £27,430
- Income Tax: £27,430 × 20% = £5,486
- National Insurance (8%): £27,430 × 8% = £2,194.40
- Take-home: £40,000 − £5,486 − £2,194.40 = £32,319.60/year (£2,693.30/month)
How 2024/25 differs from 2025/26
For most employees in England, Wales and Northern Ireland, the 2024/25 and 2025/26 tax years are identical in terms of Income Tax rates and thresholds — all main bands remain frozen. The rates shown on this page apply to both years.
The primary difference heading into 2025/26 is the employer NI increase and adjustments to Scottish bands. Student loan thresholds saw minor inflationary adjustments between the two years.