On a Graduate visa, the tax rate you pay in the UK is the same as for any other worker: nothing on the first £12,570 you earn in a tax year, 20% on the slice from £12,571 to £50,270, 40% from £50,271 to £125,140, and 45% above that. Immigration status doesn’t change the rate or unlock an exemption. Alongside income tax, expect National Insurance deductions and, if applicable, student loan repayments, all handled automatically through payroll.
Income Tax Bands and the Personal Allowance
Every UK worker gets a tax-free Personal Allowance of £12,570 per year. Tax applies only to income above that threshold, and it’s charged in bands rather than as a flat percentage of your whole salary.1GOV.UK. Income Tax Rates and Personal Allowances
For England, Wales, and Northern Ireland:
- Basic rate of 20% on taxable income from £12,571 to £50,270
- Higher rate of 40% on taxable income from £50,271 to £125,140
- Additional rate of 45% on taxable income above £125,140
On a £30,000 salary, only £17,430 sits above the allowance, so only that portion is taxed at 20%. Your effective rate ends up well below 20% once the tax-free slice is factored in. The Personal Allowance itself begins to shrink once your income passes £100,000, falling by £1 for every £2 you earn above that mark, and it disappears entirely at £125,140.1GOV.UK. Income Tax Rates and Personal Allowances
If You Work in Scotland
Scotland sets its own income tax rates. For 2026–27 these are a 19% starter rate, a 20% basic rate, a 21% intermediate rate, a 42% higher rate, a 45% advanced rate, and a 48% top rate. The £12,570 Personal Allowance still applies, but Scottish taxpayers earning above roughly £29,500 pay more than someone on the same salary in England. Your tax code starts with an “S” if Scottish rates apply.
National Insurance
National Insurance is a separate deduction sitting on top of income tax. As an employee, you pay Class 1 contributions, which fund the state pension and certain benefits. The temporary nature of the Graduate visa doesn’t change this: contributions are required for the entire time you work in the UK.
For 2026–27, employee National Insurance is charged at:2GOV.UK. Rates and Thresholds for Employers 2026 to 2027
- 8% on earnings between £12,570 and £50,270 per year
- 2% on earnings above £50,270
You need a National Insurance number so your deductions and entitlements are recorded correctly. If you have a Biometric Residence Permit, check the back or your UK Visas and Immigration account; a number may already be assigned. Otherwise, apply online while you’re in the UK. It takes up to four weeks to arrive.3GOV.UK. Apply for a National Insurance Number You don’t have to wait for the number to start work. As long as you can prove your right to work, your employer can pay you and deduct tax using a temporary reference, and you pass the real number over once it arrives.
Watch Your Tax Code
HMRC assigns you a tax code that tells your employer how much tax-free income to give you before applying deductions. The standard code is 1257L, where 1257 represents the £12,570 allowance and L means you’re entitled to the standard amount.4GOV.UK. What Your Tax Code Means
Problems start when you begin a new job without a P45 from a previous employer. Without it, your employer doesn’t know how much of your allowance you’ve already used, and may apply an emergency code. Two to look out for:
- Code BR taxes every pound of that job’s income at 20% with no tax-free allowance. It’s meant for second jobs, but wrong selections happen.
- Code 0T means no allowance is being applied, so you’re taxed from the first pound.
If you’re placed on BR or 0T when you shouldn’t be, you’ll be overtaxed on every payslip until it’s fixed. Filling out a starter checklist when you begin a role is the simplest prevention. It asks about your employment history and lets your employer apply the correct code from day one.4GOV.UK. What Your Tax Code Means
Student Loan Repayments
If you took out a UK student loan for your studies, repayments come off your pay alongside tax and National Insurance. They’re based on gross income, and the rate and threshold depend on your plan:5GOV.UK. Repaying Your Student Loan – How Much You Repay
- Plan 2 (English and Welsh undergraduate loans from September 2012): 9% on earnings above £29,385
- Plan 5 (English undergraduate loans from September 2023): 9% on earnings above £25,0006GOV.UK. Student Loans – A Guide to Terms and Conditions 2026 to 2027
- Postgraduate Loan (Master’s or doctoral loan in England or Wales): 6% on earnings above £21,000
If you hold both undergraduate and postgraduate loans, both sets of deductions run at the same time. On a £35,000 salary with Plan 2 and a Postgraduate Loan, that’s 9% of £5,615 plus 6% of £14,000. Your employer handles the payments to the Student Loans Company through payroll.5GOV.UK. Repaying Your Student Loan – How Much You Repay
If You Freelance or Go Self-Employed
The Graduate visa permits self-employment, and it changes how you pay. Instead of PAYE, you report income and pay through Self Assessment, calculating what you owe yourself and meeting the filing deadlines.7GOV.UK. Self Assessment Tax Returns – Deadlines
Income tax rates on self-employed profits are the same as for employees. National Insurance is where it differs. Self-employed workers pay Class 4:8GOV.UK. Self-Employed National Insurance Rates
- 6% on profits between £12,570 and £50,270
- 2% on profits above £50,270
The online Self Assessment return for the 2025–26 tax year (6 April 2025 to 5 April 2026) is due by 31 January 2027, and any tax owed is due the same day. Miss the deadline and automatic penalties kick in.7GOV.UK. Self Assessment Tax Returns – Deadlines
Council Tax After Your Course Ends
Council tax catches a lot of graduate visa holders off guard. As a full-time student you were likely exempt. That exemption ends the moment your course finishes, whether or not your Graduate visa has been granted yet. Living alone gets you a 25% single-person discount on the bill.9GOV.UK. How Council Tax Works – Who Has to Pay
Amounts vary widely by area and property band, with London and the south of England generally higher. Contact your local council to check your band, apply for any discount you qualify for, and set up monthly instalments if you’d rather not pay a lump sum.
Getting a Refund When You Leave the UK
The Graduate visa lasts two years, or three for doctoral graduates, so many holders leave partway through a UK tax year.10GOV.UK. Graduate Visa PAYE spreads your Personal Allowance evenly across the year. Stop working in October and you’ve only had seven months’ worth applied, even though you may be entitled to the full year’s amount. That gap often means you’ve overpaid.
To claim back what you’re owed, file Form P85 with HMRC. You qualify if you’ve lived and worked in the UK, you’re leaving and don’t expect to return, and you plan to work abroad full time for at least one full tax year. Have your P45 from your final employer ready. If you haven’t left yet, print and post the form; if you’ve already gone, submit it online.11GOV.UK. Get Your Income Tax Right if You’re Leaving the UK (P85)
HMRC sends refunds as a payable order posted to your address, which you deposit into a bank account in your name. They don’t cover currency conversion or international transfer fees, so keeping your UK bank account open until the refund arrives saves you those charges.