For the 2026/27 tax year (beginning April 6, 2026), UK employees face a “frozen” tax landscape alongside significant changes to National Insurance and Dividend taxes. Whether you are starting a new role via JobsHunt or negotiating a pay rise, understanding your take-home pay is vital.

1. Income Tax Rates & Brackets (England, Wales & NI)

The Personal Allowance remains frozen at £12,570. This means you don’t pay a penny in Income Tax until your earnings exceed this threshold.

Note for High Earners: If you earn over £100,000, your Personal Allowance is reduced by £1 for every £2 earned over that limit. Once you hit £125,140, your tax-free allowance is zero.

2. National Insurance (NI) for Employees

While the main employee NI rate remains at 8%, the thresholds have shifted slightly for 2026/27.

• Primary Threshold (PT): You start paying 8% NI once you earn more than £12,570 per year.

• Upper Earnings Limit (UEL): On earnings above £50,270, the NI rate drops to 2%.

• Lower Earnings Limit (LEL): This has increased to £6,708 (£129/week). Earning above this level ensures you continue building your State Pension record, even if you don’t earn enough to pay tax.

3. The 2026 “Dividend Tax” Hike

If you are a contractor or a director paying yourself through dividends, take note: Dividend tax rates have increased by 2% as of April 2026.

• Basic Rate: Increased from 8.75% to 10.75%.

• Higher Rate: Increased from 33.75% to 35.75%.

• Dividend Allowance: Remains at £500. You only pay tax on dividends exceeding this amount.

4. National Living Wage (NLW) 2026

From April 1, 2026, the statutory minimums have increased. If your employer is paying less than these rates, they are in breach of UK law:

• Aged 21+ (NLW): £12.71 per hour

• Aged 18–20: £10.85 per hour

• Under 18 / Apprentices: £8.00 per hour