Savings Interest Tax Calculator
Estimate how much tax you owe on your savings interest, based on your income, the Personal Savings Allowance and the starting rate for savings.
Calculate Tax on Your Savings Interest
Enter your annual income (excluding savings interest) and how much interest you expect to earn outside an ISA, to estimate how much of it is tax-free and how much tax you might owe.
Savings Interest Tax Estimate
Based on your income, allowances and current UK tax bands.
How it Works
Understanding tax on savings interest
Unused Personal Allowance
If your non-savings income is below your personal allowance, the unused portion is applied against your savings interest first, tax-free.
Starting Rate for Savings
Up to £5,000 of interest can be tax-free under this band, but it shrinks by £1 for every £1 your non-savings income exceeds your personal allowance.
Personal Savings Allowance
Next, your Personal Savings Allowance applies: £1,000 for basic rate taxpayers, £500 for higher rate, and £0 for additional rate taxpayers.
Tax on the Remainder
Any interest left over is taxed at your marginal income tax rate — 20%, 40% or 45% — depending on which tax band it falls into.
Personal Savings Allowance by Tax Band
Current UK-wide (non-Scottish) tax bands and Personal Savings Allowance, which remain unchanged from the 2025/26 tax year.
| Tax Band | Taxable Income (Excl. Savings) | Personal Savings Allowance |
|---|---|---|
| Personal Allowance | Up to £12,570 | £1,000 (if also within starting rate) |
| Basic Rate (20%) | £12,571 – £50,270 | £1,000 |
| Higher Rate (40%) | £50,271 – £125,140 | £500 |
| Additional Rate (45%) | Over £125,140 | £0 |
Savings Tax FAQ
Answers to the most frequently asked questions about tax on savings interest in the UK.
The Personal Savings Allowance (PSA) lets you earn a set amount of savings interest each tax year without paying tax on it. Basic rate taxpayers can earn up to £1,000 tax-free, higher rate taxpayers up to £500, and additional rate taxpayers do not receive a Personal Savings Allowance at all.
The starting rate for savings is a separate 0% tax band worth up to £5,000, aimed at people with low non-savings income. It’s only available if your non-savings income, such as salary or pension, is below your personal allowance plus £5,000. It reduces by £1 for every £1 your non-savings income exceeds your personal allowance.
No. Interest earned within an Individual Savings Account (ISA) is completely tax-free and does not use up your Personal Savings Allowance, regardless of how much interest you earn or which tax band you’re in. Only interest from accounts outside an ISA counts towards your allowances.
If your bank or building society interest exceeds your available allowances, the excess is taxed at your marginal rate. For most people, HMRC collects this automatically by adjusting your PAYE tax code using information reported by banks. If you complete a Self Assessment tax return, you’ll declare and pay it through that instead.