Savings Interest Tax Calculator: Tax on Your Interest This Tax Year

Enter your taxable income from other sources (pay, pensions, rental profit) and the interest you’ll earn this tax year on savings outside ISAs. The calculator applies the allowances in the order HMRC uses them and shows the tax on the interest.

The calculator uses 2026/27 rates. Leave out ISA interest, which is tax-free, and dividends, which have their own allowance. It assumes you get the standard Personal Allowance (reduced above £100,000 of income), not a different amount from something like the Marriage Allowance or Blind Person’s Allowance.

How the tax is worked out

Your savings interest is taxed after your other income, using up your allowances in this order:

1. Personal Allowance. Any of your £12,570 Personal Allowance not used by your other income covers interest first. The allowance goes down by £1 for every £2 of income over £100,000.
2. Starting rate for savings. If your other taxable income (not counting savings interest or dividends) is less than £17,570, you can also earn up to £5,000 of interest tax-free, reduced by £1 for every £1 of other income above your Personal Allowance; you can get it as well as the Personal Savings Allowance.
3. Personal Savings Allowance. Each tax year a basic rate taxpayer can earn £1,000 of savings interest tax-free, a higher rate taxpayer £500 and an additional rate taxpayer nothing; your band is worked out with your interest added to your other income.
4. Income Tax on the rest, at 20% in the basic rate band, 40% in the higher rate band and 45% above £125,140.

Interest covered by the starting rate or the Personal Savings Allowance still counts as income, so it can push you into a higher band.

From 6 April 2027 the tax rates on savings interest are 2 percentage points higher: 22%, 42% and 47%. The calculator will switch to them for the 2027/28 tax year.

Worked examples

GOV.UK’s example: £16,000 of wages and £200 of interest. The Personal Allowance covers the first £12,570 of wages. The other £3,430 reduces the starting rate to £1,570, which covers all £200 of interest: no tax.

GOV.UK’s example: a basic rate taxpayer with £1,300 of interest. The first £1,000 is covered by the Personal Savings Allowance, and the remaining £300 is taxed at 20%: £60 of tax.

A higher rate taxpayer: £60,000 of pay and £1,500 of interest. The Personal Savings Allowance is £500, and the other £1,000 is taxed at 40%: £400.

How you pay it

Banks pay interest gross. Banks and building societies tell HMRC after each tax year how much interest they paid you; with interest of £10,000 or less HMRC usually collects any tax through your tax code, and above that you report it on a Self Assessment return.

• After the tax year ends, your bank or building society tells HMRC how much interest you earned.
• If you already send a Self Assessment return, report the interest on it.
• If you're employed or get a pension, HMRC sends a tax calculation and usually collects the tax through your tax code, which may also include an estimate of this year's interest.
• Interest of more than £10,000 must go on a Self Assessment return; register if you don't already send one.

If HMRC’s estimate of your interest in your tax code looks wrong, you can ask HMRC to update it. More on the allowances, and on when a cash ISA is worth it, is in the Personal Savings Allowance.

Related guides

• Savings accounts guide: the account types, average rates, tax and protection in one place
• Personal Savings Allowance: the allowances in detail, and cash ISA or savings account
• Compound interest calculator: what your savings grow to
• Income tax guides: bands, rates and the Personal Allowance