This guide explains the main UK tax rates and thresholds for the 2023/24 tax year, including Income Tax, the Personal Allowance, National Insurance, student loan repayment thresholds, VAT and the key National Insurance context that made this tax year especially important for take-home pay comparisons.
The 2023/24 tax year ran from 6 April 2023 to 5 April 2024. These figures are useful if you are checking an old payslip, reviewing a P60, comparing historic take-home pay, completing records for Self Assessment, or using SalaryHub calculators to estimate deductions for a previous tax year.
The 2023/24 tax year is particularly useful for historic comparisons because National Insurance deductions were a major talking point around this period. If your take-home pay changed noticeably between 2023/24 and later tax years, employee National Insurance is one of the first areas worth checking.
2023/24 Tax Year Summary
- The standard Personal Allowance was £12,570.
- The default tax code was 1257L.
- The basic rate Income Tax band applied at 20%.
- The higher rate applied at 40%.
- The additional rate applied at 45%.
- Employee National Insurance was charged at 12% between the main thresholds.
- Self-employed Class 4 National Insurance was charged at 9% between the main thresholds.
- The standard VAT rate was 20%.
Income Tax Rates and Bands for 2023/24
Income Tax is charged on taxable income after your Personal Allowance has been applied. For most employees, this is handled automatically through PAYE. Your employer uses your tax code to estimate how much tax-free income you are entitled to, then deducts Income Tax from your wages before you are paid.
For self-employed people, Income Tax is usually calculated through Self Assessment using taxable profits. SalaryHub’s self-employed calculator mode estimates tax using the same tax year configuration, but the way National Insurance is applied differs from an employee salary calculation.
The Income Tax bands below are the England, Wales and Northern Ireland model used by SalaryHub. Scottish taxpayers may have different Income Tax bands and rates for some types of income.
| Income Tax band | Taxable income | Rate |
|---|---|---|
| Basic Rate | £0 to £37,700 | 20% |
| Higher Rate | £37,700 to £125,140 | 40% |
| Additional Rate | £125,140 and above | 45% |
UK Income Tax is progressive. That means you do not pay one single tax rate on all income. Instead, different parts of taxable income fall into different bands. Moving into the higher rate band does not mean all of your salary is taxed at 40%; only the portion within the higher rate band is charged at that rate.
This distinction matters when reviewing old payslips, checking tax deductions or comparing a 2023/24 salary with a salary in a later year. The gross salary is only the starting point. Your final take-home pay depends on tax bands, National Insurance, student loans, pension contributions and your tax code.
Personal Allowance for 2023/24
The standard Personal Allowance for 2023/24 was £12,570. This was the amount most people could earn before Income Tax became payable.
The default tax code in SalaryHub’s 2023/24 configuration is 1257L. For many employees, this meant the standard Personal Allowance was being applied through PAYE.
The Personal Allowance started to reduce once adjusted net income exceeded £100,000. The reduction was £1 of allowance for every £2 of adjusted net income above that level.
This taper is important because it can create a high effective tax rate for people earning above £100,000. Someone in this income range may see more of an extra bonus or pay rise lost to tax than they expected, especially once pension contributions, student loans and National Insurance are considered.
Pension contributions, salary sacrifice and Gift Aid can sometimes reduce adjusted net income. This is why tax planning around the £100,000 threshold is a common topic for higher earners reviewing 2023/24 income.
National Insurance Changes and 2023/24 Context
The 2023/24 tax year is one of the more useful historic years to include in a tax threshold archive because National Insurance was a major factor in take-home pay comparisons around this period.
National Insurance is separate from Income Tax. Employees pay employee National Insurance through payroll, while self-employed people usually pay Class 4 National Insurance on profits. Because National Insurance has its own rates and thresholds, changes to NI can affect take-home pay even when Income Tax bands appear unchanged.
In practical terms, many people comparing pay between 2023/24 and later years may notice that their net pay changed even if their salary stayed similar. That difference may come from National Insurance rates, student loan thresholds, pension deductions, tax codes or changes to gross pay.
This is why SalaryHub separates tax year selection from salary input. The same salary can produce a different estimated take-home pay figure depending on whether you calculate it using 2023/24, 2024/25, 2025/26 or 2026/27 tax year settings.
Employee National Insurance Thresholds for 2023/24
Employee National Insurance is usually deducted automatically from wages. It applies separately from Income Tax and is calculated using the employee National Insurance thresholds and rates for the tax year.
| Employee NI item | 2023/24 value |
|---|---|
| Primary threshold | £12,570 |
| Upper earnings limit | £50,270 |
| Main employee NI rate | 12% |
| Additional employee NI rate | 2% |
In SalaryHub’s 2023/24 configuration, employee National Insurance was charged at 12% between the primary threshold and upper earnings limit, then at 2% above the upper earnings limit.
National Insurance can be one of the most visible deductions on an employee payslip. For someone earning within the main NI band, it can make a significant difference to monthly take-home pay.
When checking an old 2023/24 payslip, remember that National Insurance is normally calculated by pay period, not just by dividing annual thresholds into a simple annual estimate. SalaryHub’s calculators are designed to provide a clear estimate, but actual payroll results may vary slightly depending on pay frequency and payroll timing.
Self-Employed National Insurance Thresholds for 2023/24
Self-employed workers are usually taxed on profits rather than salary. SalaryHub’s self-employed calculations use Class 4 National Insurance thresholds and rates for the selected tax year.
| Self-employed NI item | 2023/24 value |
|---|---|
| Class 4 lower profits limit | £12,570 |
| Class 4 upper profits limit | £50,270 |
| Class 4 main rate | 9% |
| Class 4 additional rate | 2% |
In SalaryHub’s 2023/24 configuration, Class 4 National Insurance was charged at 9% between the lower and upper profits limits, then at 2% above the upper profits limit.
This is important when comparing employed and self-employed income. A £50,000 employment salary and £50,000 of self-employed profit may not produce the same take-home figure because National Insurance is calculated differently.
Student Loan Repayment Thresholds for 2023/24
Student loan repayments are based on your repayment plan and your income. They are not calculated like a normal personal loan repayment. Instead, repayments usually apply only to income above the relevant annual threshold.
| Student loan plan | Annual threshold | Repayment rate |
|---|---|---|
| Plan 1 | £22,015 | 9% |
| Plan 2 | £27,295 | 9% |
| Plan 3 / Postgraduate Loan | £21,000 | 6% |
| Plan 4 | £27,660 | 9% |
| Postgraduate Loan | £21,000 | 6% |
Most undergraduate student loan plans use a repayment rate of 9% above the relevant threshold. Postgraduate Loans use a repayment rate of 6% above their threshold.
For example, a Plan 2 borrower in 2023/24 only made Plan 2 repayments once income was above £27,295. The repayment was based on income above that threshold, not on the full salary.
Student loan deductions can make a significant difference to take-home pay, especially for graduates with earnings above the repayment threshold. If you are comparing a 2023/24 payslip with a newer payslip, check whether your plan threshold changed as well as your salary.
VAT Thresholds for 2023/24
VAT is mainly relevant to businesses and self-employed workers. It does not usually affect employee take-home pay directly, but it is an important threshold for anyone running a business.
| VAT item | 2023/24 value |
|---|---|
| VAT registration threshold | £85,000 |
| VAT deregistration threshold | £83,000 |
| Standard VAT rate | 20% |
If taxable turnover exceeded the VAT registration threshold, a business may have needed to register for VAT. VAT is normally based on taxable turnover, not profit, so it should be monitored separately from income tax estimates.
How These Thresholds Affected Take-Home Pay
The 2023/24 tax thresholds affected how much of a salary, bonus or self-employed profit became take-home income. Gross salary is the headline figure, but net pay depends on deductions.
Common deductions include Income Tax, National Insurance, pension contributions, student loan repayments and other payroll deductions. These can interact in different ways depending on your tax code, employment type and pension settings.
Two people earning the same gross income in 2023/24 may have received different net pay. One person may have had student loan repayments, another may have had larger pension contributions, and another may have had a different tax code.
The selected tax year also matters. A salary checked against 2023/24 thresholds may not produce the same result as the same salary checked against 2024/25, 2025/26 or 2026/27 thresholds.
Comparing 2023/24 with Later Tax Years
The 2023/24 tax year is especially useful for comparing historic take-home pay because deductions changed around this period. When comparing 2023/24 with later years, look carefully at National Insurance, student loan thresholds and any changes to your tax code or pension contributions.
A useful comparison usually includes:
- The same gross salary across each tax year
- The same employment type
- The same pension contribution settings
- The same student loan plan
- The correct tax year selected in the calculator
This makes it easier to isolate the effect of tax and threshold changes rather than mixing them with changes in salary, bonuses or deductions.
Useful SalaryHub Calculators
- Salary Calculator 2023/24
- Income Tax Calculator 2023/24
- Student Loan Calculator 2023/24
- Bonus Pay Calculator 2023/24
- Take-Home Pay Over the Years Calculator
Estimate 2023/24 Take-Home Pay
Use SalaryHub’s calculators to estimate Income Tax, National Insurance, student loan repayments and net pay using the 2023/24 tax year thresholds.
Use the Salary CalculatorFrequently Asked Questions
What was the Personal Allowance for 2023/24?
The standard Personal Allowance for 2023/24 was £12,570.
What was the basic rate of Income Tax in 2023/24?
The basic rate of Income Tax was 20% on taxable income within the basic rate band.
What was the employee National Insurance rate in 2023/24?
Employee National Insurance was charged at 12% between the primary threshold and upper earnings limit, then at 2% above the upper earnings limit.
Why is 2023/24 useful for take-home pay comparisons?
2023/24 is useful because National Insurance was a major factor in take-home pay comparisons around this period. Comparing this year with later years can help explain why net pay changed even when gross salary was similar.
What was the Plan 2 student loan threshold in 2023/24?
The Plan 2 student loan threshold for 2023/24 was £27,295.
Is this guide for Scottish taxpayers?
This guide uses the England, Wales and Northern Ireland Income Tax model used by SalaryHub. Scottish Income Tax bands can differ for some types of income.
Final Thoughts
The 2023/24 UK tax rates and thresholds are still useful for historic payslip checks, P60 reviews, student loan deduction checks and salary comparisons. Using the correct tax year matters because tax bands, National Insurance and student loan thresholds can change over time.
SalaryHub’s tax year guides and calculators help connect the figures behind the calculation with the estimated take-home pay result, making it easier to understand how Income Tax, National Insurance, student loans and pension deductions affected income in 2023/24.