Basic Rate
The standard income tax rate of 20% applied to taxable income between the Personal Allowance and the higher-rate threshold, currently £12,571 to £50,270 in England, Wales, and Northern Ireland. Scotland has its own set of rates (starter, basic, and intermediate) that differ from the rest of the UK. Most employed workers pay predominantly at the basic rate.
How it works
The basic rate applies to taxable income between the top of your Personal Allowance and the higher-rate threshold — currently £12,570 to £50,270 in England, Wales, and Northern Ireland. Because most employees never earn enough to reach the higher-rate threshold, the basic rate is where the majority of UK income tax is actually collected, even though the additional and higher rates get more attention.
Scotland uses a different structure with more, narrower bands: a Starter Rate of 19%, a Basic Rate of 20%, and an Intermediate Rate of 21%, before moving into Scotland's Higher, Advanced, and Top rates. This means a Scottish basic-rate taxpayer's income is actually split across three separate Scottish bands rather than one, even though the headline 20% basic rate matches the rest of the UK.
Being a basic-rate taxpayer matters for more than just your own income tax bill — it determines whether you can receive Marriage Allowance from a partner, and it sets the rate of automatic pension tax relief you get under relief-at-source pension schemes. Moving from basic rate into higher rate can also affect eligibility for benefits like Marriage Allowance, which requires the recipient to remain a basic-rate taxpayer.
Example: basic rate on a £40,000 salary
On a salary of £40,000, the first £12,570 is covered by the Personal Allowance and is tax-free.
The remaining £27,430 falls entirely within the basic-rate band and is taxed at 20%, giving income tax of £5,486 for the year.
Frequently asked questions
Do I pay the basic rate on my entire salary?
No. Your Personal Allowance is tax-free first, and only the portion of income between the Personal Allowance and £50,270 is taxed at the 20% basic rate.
Is the basic rate the same in Scotland?
The headline 20% rate matches, but Scotland also has a Starter Rate of 19% and an Intermediate Rate of 21% that split up what would be one basic-rate band elsewhere in the UK.
Does being a basic-rate taxpayer affect my pension relief?
Yes. Basic-rate taxpayers automatically receive 20% pension tax relief under relief-at-source schemes, added directly to their pension pot by the provider.
Related Terms
Higher Rate
The income tax rate of 40% applied to taxable income above £50,270 up to £125,140 in England, Wales, and Northern Ireland.
Additional Rate
The highest income tax rate in England, Wales, and Northern Ireland, charged at 45% on taxable income above £125,140.
Personal Allowance
The amount of income you can earn in a tax year before paying income tax, currently £12,570 and frozen until April 2031 (the freeze was extended by three years at the Autumn Budget 2025).
Tax Bands
The ranges of taxable income to which different income tax rates apply, creating the UK's progressive tax system.
Tax Code
A code issued by HMRC to your employer to tell them how much income tax to deduct from your pay each period.
Try the calculator
Use our free tool to see how basic rate affects your tax.