Over a million people in the UK paid the highest income tax rate in the 2024-25 tax year, according to new research.
UHY Hacker Young reports that highest income tax rate payers reached 1.14 million and this marks a 24 per cent increase from the 923,000 recorded in the previous tax year.
This year, the number of “additional rate” taxpayers, who pay 45 per cent tax is expected to be 1.23 million.
The tax structure in Britain consists of income tax bands at 20 per cent, 40 per cent, and 45 per cent and national insurance contributions of an additional 12 per cent.
Low-income earners enjoy a tax-free personal allowance of £12,570, which is more than in most other nations.
The Basic Rate (20 per cent) applies to income between £12,571 and £50,270. Higher Rate (40 per cent) applies to income between £50,271 and £125,140. And Additional Rate (45 per cent) applies to income above £125,140.
How higher tax brackets in the UK compare to other countries
France
Gross salary €292,000
Total Income Tax €107,000 + €64,240 social charges
Tax rate 58.6 per cent
France heavily taxes high earners, mostly due to massive social charges, which often exceed 20 per cent –25 per cent of gross salary.
The UK’s top rate kicks in earlier and has the “stealth” 60 per cent band between £100k–£125k, but overall tax burden is lower than France’s at high income.
If you earn a high salary in France as an employee, your take-home pay is significantly lower than in the UK.
At £250k income, a UK employee takes home about 45 per cent more than a French employee after taxes and social charges.
France’s very high social charges (c. 22 per cent) on top of income tax create a much higher overall tax burden.
The UK’s top rate is lower and social taxes are much smaller, resulting in significantly higher take-home pay.
Germany
Gross salary €292,000
Total Income Tax €110,000 + €6,050 solidarity subcharge and 18,000 social security
Tax rate 46.0 per cent
Germany’s higher income tax rates kick in later (around €277k vs £125k in the UK).
However, Germany’s significant social security contributions (c. 20%) push total deductions higher.
UK high earners keep more of their pay at £250k income level, thanks to lower social taxes.
Germany’s tax system is more progressive and comprehensive, covering healthcare and pensions through social contributions.
At £250k income, UK employees take home about £10,000 more than in Germany after tax and social contributions.
Germany’s higher social security costs and solidarity surcharge increase the effective tax burden.
The UK has a slightly lower overall tax and social contribution rate.
Spain
Gross salary €292,000
Total Income Tax €120,000 + €3,200 social security
Tax rate 42.5 per cent
Spain’s top marginal rate is slightly higher (45 per cent starting at €60,001) compared to the UK’s 45 per cent starting at £125k.
Social security contributions in Spain are low but capped, adding a small fixed cost.
Overall, the UK offers slightly higher take-home pay at the £250k level compared to Spain (Madrid).
Regional differences in Spain can slightly alter tax rates.
Italy
Gross salary €292,000
Total Income Tax €124,760 + €9,400 social security
Tax rate 32.2 per cent
Italy’s top income tax rate (43%) applies starting from just €50,000, compared to the UK’s 45 per cent starting above £125k.
Italy has higher social security contributions (about 9.4 per cent) versus the UK’s 3.4 per cent NI at this income.
The overall tax and social charge burden in Italy is higher, resulting in about £20,000 less take-home pay at this income level.
The UK offers a significantly better take-home pay at £250k income.
US
Gross salary $200,000 (in California)
Total Income Tax $64,353 (~£50,000 equiv.)
Tax rate 32.2 per cent
The UK and US both have progressive income tax systems, but they differ significantly in terms of tax brackets, rates, thresholds, and what is taxed.
For example, the US federal tax rates range from 10 per cent to 37 per cent, but the UK has a progressive tax system with rates ranging from 20 per cent to 45 per cent.
Additionally, while UK taxes are based on residence and domicile status, USA taxes its citizens and residents on their worldwide income.
The UK imposes higher marginal tax rates at lower income thresholds than the US.
A person earning between £50,000 and £125,140 in the UK is in the high marginal bracket (40 per cent), while in the US, that income is still within the 22–24 per cent range federally.
US high earners in California still take home slightly more than UK counterparts, despite state taxes.
Australia
Gross salary AUD $200,000
Total Income Tax AUD $60,942
Tax rate 47 per cent (including Medicare, starts at $190,000)
Compared to Australia, the UK begins taxing high earners at a lower income.
Australia's top marginal rate is slightly higher (47 per cent including the Medicare levy).
However, UK high earners feel the pinch earlier, especially due to the personal allowance taper, which creates an effective 60 per cent marginal rate between £100,000–£125,140.
Australia's tax is more “compressed” with fewer bands and a wider 30 per cent band.
While the 40 per cent kicks in at £50,000 in the UK, Australia’s top marginal rate (37 per cent) kicks in at AUD 135,000 (£65,710).
Canada
Gross salary $200,000 NZD
Total Income Tax $58,120 NZD
Tax rate 39 per cent (on $180k+)
The UK taxes high earners earlier, while in Canada those earning between $0 – $55,867 (£30,319) are taxed 15 per cent.
Canada’s top federal rate is lower (33 per cent), but provincial taxes push the combined rate higher than the UK in many provinces.
Ontario, Quebec, and BC all have combined top rates between 46 per cent and 54 per cent.
The UK’s “stealth” 60 per cent marginal rate (between £100k–£125k) due to personal allowance withdrawal has no direct equivalent in Canada.
New Zealand
Gross salary CAD $440,000
Total Income Tax CAD $178,916
Tax rate 40.66 per cent
The UK has a higher top marginal tax rate (45 per cent vs 39 per cent) and starts taxing higher earners at lower income thresholds.
New Zealand’s system is simpler, with fewer brackets, no tapering of allowances, and very minimal payroll tax.
No equivalent to the UK’s 60 per cent effective rate in NZ. The top tax rate kicks in cleanly at NZD $180,000 (£79,974)
