Scotland’s higher rate of 42% explained (2026/27)
Scotland’s higher rate of 42% starts at £43,663 of pay, where the rest of the UK still charges 20% on the same pound. It is where the two systems part company by the widest margin, and where the gap in take-home pay starts to open.
Where the 42% band sits 2026/27
The band is set by the Scottish Parliament. The Personal Allowance below it, and the National Insurance charged on the same pay, are set at Westminster and are the same across the UK.
| Item | 2026/27 |
|---|---|
| Rate | 42% |
| First pound of pay it applies to | £43,663 |
| Last pound of pay it applies to | £75,000 |
| Rate on the same pay elsewhere in the UK | 20% |
| National Insurance on the same pay | 8% |
Why it bites hardest below the Upper Earnings Limit
National Insurance falls from 8% to 2% above the Upper Earnings Limit, which is set UK-wide. Between the start of the Scottish higher rate and that limit the two charges stack at their full rates, and the marginal rate is at its highest.
| Yearly pay | Income tax | National Insurance | Take-home a month | Next pound costs |
|---|---|---|---|---|
| £43,663 | £6,320.51 | £2,487.00 | £2,904.62 | 50% |
| £46,967 | £7,708.19 | £2,751.24 | £3,042.30 | 50% |
| £50,270 | £9,095.45 | £3,015.36 | £3,179.93 | 44% |
What it costs against the rest of the UK
Two engine runs on the same salary: one on the Scottish ladder, one on the rest of the UK’s. Only income tax differs.
| Yearly pay | England, Wales, NI | Scotland | Difference a year |
|---|---|---|---|
| £43,663 | £34,957.40 | £34,855.49 | −£101.91 |
| £46,967 | £37,336.36 | £36,507.57 | −£828.79 |
| £50,270 | £39,714.64 | £38,159.19 | −£1,555.45 |
Sources
Every rate and threshold on this page is read from the rules file these documents were transcribed into, with the date it was checked in the strip above.