Find the money you can keep
How much tax do I pay?
Tax is charged in slices, not one flat rate, so almost nobody pays their headline percentage on everything they earn. Here is how the slices work, and how much of yours you could legally keep.
The short answer
Your income is cut into bands. The first slice is usually tax free, then each slice above it is charged at a higher rate, and only that slice pays the higher rate. The number that matters for planning is your rate on the next pound you earn, because that is what a pension contribution or a well timed sale saves you.
United Kingdom, 2025/26
| Slice of income | Amount | What you pay |
|---|---|---|
| Personal allowance | First 12,570 | No income tax |
| Basic rate | 12,571 to 50,270 | 20 per cent |
| Higher rate | 50,271 to 125,140 | 40 per cent |
| Additional rate | Over 125,140 | 45 per cent |
| The 100,000 trap | 100,000 to 125,140 | Effectively 60 per cent as the allowance is withdrawn |
| National Insurance | 12,571 to 50,270, then above | 8 per cent, then 2 per cent |
United States, federal 2025
| Slice of income | Amount | What you pay |
|---|---|---|
| Standard deduction | First 15,000 single, 30,000 married filing jointly | No federal income tax |
| 10 and 12 per cent bands | The first slices of taxable income | 10 then 12 per cent |
| 22 and 24 per cent bands | Middle incomes | 22 then 24 per cent |
| 32, 35 and 37 per cent bands | Higher incomes | Up to 37 per cent federal |
| Social Security and Medicare | Wages up to 176,100, then Medicare only | 7.65 per cent as an employee |
| Self-employment tax | Net profit | 15.3 per cent, half of it deductible |
| State tax | Depends where you live | Nothing in Texas or Florida, over 13 per cent in California |
Australia, 2025/26
| Slice of income | Amount | What you pay |
|---|---|---|
| Tax free threshold | First 18,200 | No tax |
| 16 per cent band | 18,201 to 45,000 | 16 per cent |
| 30 per cent band | 45,001 to 135,000 | 30 per cent |
| 37 per cent band | 135,001 to 190,000 | 37 per cent |
| 45 per cent band | Over 190,000 | 45 per cent |
| Medicare levy | Most taxable income | 2 per cent on top |
| Super contributions | Inside the concessional cap | Taxed at 15 per cent instead of your rate |
Why two people on the same pay owe different amounts
- Pension or super contributions come off before tax, so they move you down a band.
- Where you live changes it: Scotland has its own rates, and US state tax ranges from nothing to over 13 per cent.
- Self-employed profit carries National Insurance or self-employment tax that a salary handles differently.
- Allowances you have never claimed, such as marriage allowance or working from home, quietly reduce the bill.
That is the whole point of the planner. It asks what applies to you, then shows the legal moves in order of how much each one keeps in your pocket.