Glossary · UK
What is Marginal Tax Rate?
The tax rate you pay on the next £1 of income — used to evaluate pay rises and pension contributions.
Full Definition
The marginal tax rate is the combined income tax plus NI you would pay on the next £1 of income. In 2025/26 rUK it is 0% below £12,570; 28% between £12,570 and £50,270 (20% + 8% NI); 42% between £50,270 and £100,000 (40% + 2% NI); roughly 62% between £100,000 and £125,140 because of the Personal Allowance taper; and 47% above £125,140. Scotland adds different bands. Marginal rate is the correct number to use when weighing a salary sacrifice into pension, a Gift Aid donation, or whether to take a bonus this year or next.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.