Answers · UK 2025/26
Why was my pay taxed at 40%?
You hit the 40% higher-rate band when annualised earnings exceed £50,270 in 2025/26. PAYE projects your monthly pay across the year, so a bonus, overtime or pay rise can trigger 40% tax that month even if your annual total ends up lower. It usually evens out by year end.
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The 40% higher-rate Income Tax band applies to taxable income between £50,270 and £125,140 in 2025/26 (rUK). PAYE software annualises your year-to-date pay, so an unusually large month — a bonus, commission, back-pay, overtime — can lift the projection above £50,270 and tax the excess at 40%. Common scenarios: (1) you got a bonus; (2) you started a new higher-paid job mid-year and HMRC has not yet adjusted your code; (3) you have a second job on a BR or D0 code; (4) you ticked the wrong starter declaration. If the high pay is genuinely a one-off, PAYE rebalances in later months as the cumulative calculation catches up — you may notice less tax taken in following pay packets. If you believe your code is wrong, check your Personal Tax Account at gov.uk and ask HMRC to correct it. Scotland has a 42% intermediate higher-rate band starting at £43,662.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.