Armed Forces Pay and Tax Guide 2026/27: Take-Home Pay
How UK Armed Forces pay is taxed in 2026/27: PAYE, National Insurance, allowances, mileage, pensions and what overseas postings mean for your take-home pay.
Quick answer
UK Armed Forces pay is taxed through PAYE in the same way as any UK salary. In 2026/27 you keep the first GBP 12,570 tax-free, then pay 20% to GBP 50,270, 40% above that and 45% over GBP 125,140, plus employee National Insurance at 8% then 2%. Service does not exempt you from tax, but specific allowances, mileage relief and pension reliefs can reduce what you owe.
How service pay is taxed
Basic military pay is treated as employment income. Your service pay office acts as your employer for PAYE purposes, deducting Income Tax and Class 1 National Insurance before your salary reaches your bank account. There is no special "military tax band" - the standard UK rates and thresholds apply.
For the 2026/27 tax year (6 April 2026 to 5 April 2027) the position in England, Wales and Northern Ireland is:
| Band | Taxable income (gross) | Rate |
|---|---|---|
| Personal Allowance | Up to GBP 12,570 | 0% |
| Basic rate | GBP 12,571 to GBP 50,270 | 20% |
| Higher rate | GBP 50,271 to GBP 125,140 | 40% |
| Additional rate | Above GBP 125,140 | 45% |
The Personal Allowance is frozen at GBP 12,570 until April 2028. If your total income passes GBP 100,000 - which can happen for senior officers, or for anyone with significant other income - the allowance reduces by GBP 1 for every GBP 2 of income above GBP 100,000 and reaches zero at GBP 125,140. Because you lose tax-free allowance while also paying 40% on the income itself, the effective marginal rate across this band is 60%. Pension contributions are a common way to manage income in that zone.
National Insurance
Employee Class 1 National Insurance in 2026/27 is 8% on earnings between GBP 12,570 and GBP 50,270, and 2% on everything above GBP 50,270. This sits on top of Income Tax and is also handled through PAYE. The rates are identical UK-wide, so unlike Income Tax there is no Scottish variation.
To see how the two deductions stack up against a specific salary, run the figures through a calculator.
Take-Home Pay Calculator
Calculate your net salary after income tax, National Insurance and student loan deductions.
Open Take-Home Pay calculatorService allowances: taxable or not?
This is where military pay differs most from a standard civilian salary. Personnel can receive a range of allowances, and the tax treatment is not uniform:
- Allowances that reimburse a genuine expense of service may be paid free of tax and National Insurance.
- Allowances that effectively top up earnings are taxable pay and go through PAYE.
The split is determined by HMRC rules and your service pay regulations, not by personal choice or by how the allowance is labelled informally. Your payslip and tax code reflect the official treatment. If you want to understand the taxable portion of your total package, separate out the taxable allowances and add them to basic pay before applying the bands above.
Mileage and duty travel
If you use your own vehicle for business travel on duty and your employer reimburses you below HMRC's approved mileage rates, you can claim Mileage Allowance Relief on the shortfall. The approved Mileage Allowance Payment (AMAP) rates for 2026/27 are:
| Vehicle | First 10,000 business miles | Over 10,000 miles |
|---|---|---|
| Cars and vans | 45p per mile | 25p per mile |
| Motorcycles | 24p per mile | 24p per mile |
| Bicycles | 20p per mile | 20p per mile |
If you are reimbursed at, say, 25p per mile for car travel, you can claim relief on the gap up to 45p for the first 10,000 miles. Relief is given at your marginal rate of tax, so a higher-rate taxpayer gets more cash back per mile claimed. Keep accurate mileage records, because HMRC can ask you to evidence the journeys.
Pensions and saving while serving
Contributions to a registered pension scheme generally attract tax relief, and the Annual Allowance - the most you can usually contribute with relief in a year - is GBP 60,000 in 2026/27. If you have already started drawing certain pension benefits, the Money Purchase Annual Allowance of GBP 10,000 may apply instead.
Pension contributions are also a practical tool for personnel whose income strays into the GBP 100,000 to GBP 125,140 band, because reducing taxable income can restore part of the Personal Allowance and avoid the 60% effective rate.
Outside pensions, the main tax-efficient wrappers are unchanged for 2026/27:
- ISA allowance: GBP 20,000 per tax year, with returns free of Income Tax and Capital Gains Tax.
- Lifetime ISA: a 25% government bonus, up to GBP 1,000 a year, useful for a first home or later-life saving within the scheme rules.
A pension contribution gives tax relief now and is taxed on the way out in retirement. An ISA gives no up-front relief but pays out tax-free. Personnel often use both: pensions for long-term retirement income and ISAs for accessible savings.
To project how regular saving could grow, or to weigh contribution levels, try the planning tools.
Pension Calculator
Estimate your pension pot at retirement and projected annual income.
Open Pension calculatorServing overseas
Armed Forces personnel are Crown servants, and Crown servants are generally treated as UK resident for tax even while posted abroad. In practice that means UK Income Tax usually continues to apply to your service pay during an overseas posting. The precise position can depend on your residence status and on any double taxation arrangement with the country concerned, so it is not always straightforward.
Some overseas postings carry allowances that reflect local cost of living and conditions of service. As with home allowances, whether each one is taxable depends on HMRC rules. If your circumstances are unusual - for example a long posting, or income arising in another country - confirm the treatment with your service pay office or the guidance on gov.uk rather than relying on assumptions.
Scotland and the rest of the UK
If HMRC records your main residence as being in Scotland, Scottish Income Tax may apply, using a wider set of bands: Starter 19%, Basic 20%, Intermediate 21%, Higher 42%, Advanced 45% and Top 48%. For frequently relocated personnel, deciding where the main home sits can be less obvious than for civilians, and your tax code (which carries an "S" prefix for Scottish taxpayers) reflects HMRC's record.
National Insurance does not vary by nation, so only the Income Tax element differs. If you think your tax code shows the wrong nation, raise it with HMRC promptly, because a wrong code can leave you over- or under-paying for months.
Checking your payslip
Errors most often come from an incorrect tax code, a missed allowance change, or a starter/leaver event mid-year. To check your take-home pay:
- Note your gross annual pay, including taxable allowances.
- Confirm your tax code and whether an "S" (Scottish) prefix applies.
- Compare the Income Tax and National Insurance lines against an independent calculation.
- Check whether student loan deductions apply - Plan 1 starts at GBP 26,900, Plan 2 at GBP 29,385, Plan 5 at GBP 25,000 and Postgraduate at GBP 21,000, with repayments of 9% (6% for postgraduate) above the threshold.
If the numbers do not reconcile, raise it with your pay office first and, if needed, contact HMRC. Keep payslips and any P60 in case you need to evidence a claim or correct a code.
Income Tax Calculator
Work out how much income tax you owe using the latest 2025/26 UK tax bands.
Open Income Tax calculatorBottom line
Armed Forces pay is taxed like any UK salary, with the 2026/27 Personal Allowance of GBP 12,570, Income Tax at 20%, 40% and 45%, and National Insurance at 8% then 2%. The military-specific complexity lies in allowances, overseas postings and which nation's Income Tax applies. Get those right, claim the reliefs you are due - mileage and pensions especially - and check your payslip against an independent calculation each tax year. For anything genuinely uncertain, confirm with your pay office or gov.uk rather than guessing.
Frequently asked questions
Do members of the UK Armed Forces pay Income Tax and National Insurance?
Yes. Serving personnel are taxed under PAYE in the same way as other UK employees. Income Tax and Class 1 National Insurance are deducted from basic pay and most taxable allowances before you receive your net salary. The standard Personal Allowance of GBP 12,570 applies, with Income Tax at 20%, 40% and 45% across the bands. Military service does not give a blanket exemption from tax, although some specific allowances and reliefs exist.
What is the Personal Allowance for the 2026/27 tax year?
The Personal Allowance is GBP 12,570 for 2026/27 and remains frozen until April 2028. You pay no Income Tax on the first GBP 12,570 of taxable income. If your total income exceeds GBP 100,000 the allowance tapers by GBP 1 for every GBP 2 above that figure, disappearing entirely at GBP 125,140. This taper creates an effective 60% marginal rate between GBP 100,000 and GBP 125,140, which can affect senior officers.
How much National Insurance do soldiers pay in 2026/27?
Class 1 employee National Insurance is charged at 8% on earnings between GBP 12,570 and GBP 50,270, and 2% on earnings above GBP 50,270. These are the same rates that apply to civilian employees. NI is deducted automatically through PAYE alongside Income Tax. Pension contributions and the way certain allowances are treated can change the exact figure, so check your payslip against a take-home pay calculation.
Can I claim tax relief on mileage for using my own car on duty?
If you use your own vehicle for business travel and are not fully reimbursed at the approved rate, you may claim Mileage Allowance Relief. The HMRC approved rates (AMAP) are 45p per mile for the first 10,000 business miles in the tax year and 25p after that for cars and vans, 24p for motorcycles and 20p for bicycles. You claim relief on the difference between what your employer pays and these rates.
Is the Armed Forces pension taxed?
Pension income in retirement is taxable as earned income through PAYE or self assessment, set against your Personal Allowance and the Income Tax bands. The lump sum element of an Armed Forces pension is generally tax-free within HMRC limits. Contributions to a registered pension while serving usually receive tax relief, and the Annual Allowance for pension saving is GBP 60,000 in 2026/27. Specialist advice is sensible for large or complex pension decisions.
What happens to my tax when I am posted overseas?
Crown servants, including Armed Forces personnel, are generally treated as UK resident for tax even when serving abroad, so UK Income Tax usually continues to apply. The detailed position depends on your residence status and any double taxation arrangements. Some overseas allowances are paid to reflect the cost and conditions of a posting. Always check your specific circumstances with the relevant service pay office or gov.uk guidance.
Do I need to complete a Self Assessment tax return?
Most serving personnel are taxed entirely through PAYE and do not need to file. You may need a Self Assessment return if you have untaxed income such as rental profit above the GBP 1,000 property allowance, significant savings or dividend income, or if you are claiming reliefs that cannot be handled through your tax code. If your total income exceeds GBP 100,000, HMRC may also ask you to file.
Are my service allowances tax-free?
It depends on the allowance. Some allowances are paid to reimburse genuine expenses and may be tax-free, while others form part of taxable pay and are subject to Income Tax and National Insurance through PAYE. The treatment is set by HMRC rules and your service pay regulations rather than chosen by you. Check your payslip coding and the official guidance for each allowance rather than assuming a blanket position.
Does living in Scotland change my tax as a serving member?
Scottish Income Tax can apply if your main residence is in Scotland, using rates from 19% up to 48% across the Scottish bands. However, the rules for Crown servants and frequently relocated personnel can be complex, and your tax code reflects where HMRC records your main home. National Insurance rates are the same across the UK. If you are unsure which regime applies to you, confirm it with HMRC or your pay office.
How do I check my Armed Forces take-home pay is correct?
Compare your payslip against an independent calculation. Enter your gross annual pay, note your tax code, and check the Income Tax and National Insurance deductions line by line. A take-home pay calculator applies the 2026/27 Personal Allowance, Income Tax bands and the 8% and 2% NI rates so you can spot errors such as a wrong tax code or missing allowances. If figures do not reconcile, raise it with your pay office and HMRC.
Try the calculators
Take-Home Pay Calculator
Calculate your net salary after income tax, National Insurance and student loan deductions.
Income Tax Calculator
Work out how much income tax you owe using the latest 2025/26 UK tax bands.
National Insurance Calculator
Calculate your National Insurance contributions for 2025/26.
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