Questions and answers

Fiscal drag is what happens when tax thresholds stay the same while pay and prices rise. More of your income ends up taxed, or taxed at a higher rate, even though no tax rate has changed.

The Office for Budget Responsibility describes it as rising wages tipping 'ever greater numbers of workers into the tax system or onto higher rates'.

The freeze was announced in March 2021, but thresholds for 2021/22 still rose with inflation (the allowance went from £12,500 to £12,570, and the 40% threshold from £50,000 to £50,270). The cash freeze starts in 2022/23.

So 2021/22 is the starting point. If your pay that year is the same as later years, it shows no extra tax.

Because that is what the law does by default. The Income Tax Act 2007 (sections 21 and 57) raises the personal allowance and basic rate band each April by the previous September’s CPI, rounding up to the next £10 and £100. We apply exactly that rule to every frozen year.

No. It is an illustration based on a simplified annual calculation. Your real tax depends on things we don’t ask about, and your payslip may differ. For advice about your own tax, speak to HMRC or a qualified adviser.

The NI upper earnings limit is frozen at £50,270 as well. Above it you pay 2% instead of 8%. If that limit had risen with inflation, more of your pay would sit in the 8% band. So if you earn more than £50,270, the frozen limit slightly lowers your NI.

We show this so the total is fair. NI is off by default; switch it on to include it.

Because the freeze has a ceiling. Once you earn more than the indexed 40% threshold (£64,480 in 2026/27), you lose the full value of both frozen thresholds: a smaller tax-free allowance and a smaller 20% band. That costs £3,544 in 2026/27, and earning more doesn't make it bigger.

The £100,000 allowance taper doesn't change this, because it was never indexed and so applies the same way on both sides of the comparison. So everyone from about £64,480 to £125,140 sees the same income tax figure.

The tax-free allowance shrinks by £1 for every £2 earned over £100,000. With the frozen allowance it is gone by £125,140; even if it had kept up with inflation it would be gone by £132,160 (2026/27 figures).

So above that point the frozen allowance costs you nothing, and your extra tax comes only from the smaller 20% band. That's less than the cost to someone on £70,000, who loses the value of both.

Yes. Enter your current salary and we fill every year with it. Then change any year where your pay was different, or clear a year to skip it. A pay rise during the freeze usually means a bigger gap, because more of the rise falls into a higher band.

Because that is how far the freeze currently runs in law. The Autumn Budget 2025 extended it to 5 April 2031. The projection assumes your pay stays the same and that inflation follows the OBR forecast, so it is an estimate.

Scotland sets its own income tax bands and rates, so the sums are different. A Scottish version is planned for v2. For now the calculator covers England, Wales and Northern Ireland.

Thresholds and rates come from legislation.gov.uk, GOV.UK and HMRC. Inflation figures come from the Office for National Statistics, and forecasts from the Office for Budget Responsibility. Our methodology page lists every source and every formula.