Savings tax calculator
See how much of your savings interest is tax-free under the Personal Savings Allowance — and how much is taxed at your marginal rate.
Tax due on your interest
£200
Your Personal Savings Allowance is £1,000, based on £32,000 total income.
How your £2,000 interest is treated
Tax-free interest
£1,000
Taxable interest
£1,000
Assumes your other income uses up your Personal Allowance and tax bands first, with savings interest stacked on top — the order HMRC actually uses. Uses simplified 2026/27 UK Income Tax bands and ignores dividends. Not financial advice.
How tax on savings interest works
Most savings interest earned outside an ISA is taxable income, but two allowances usually shield some or all of it. First, any part of your Personal Allowance not used up by your other income (salary, pension, etc.) covers interest tax-free. Then the Personal Savings Allowance — up to £1,000 a year for basic-rate taxpayers, £500 for higher-rate, and nothing for additional-rate — covers interest at 0% regardless of income, though it still counts as taxable income for working out which band you're in.
If you have little or no other income, a further £5,000 "starting rate for savings" band can also apply, on top of the Personal Savings Allowance — this is what lets someone living mostly off savings earn a substantial amount of interest completely tax-free.