Teacher tax in one paragraph: UK teachers pay PAYE through their school's payroll on basic salary plus allowances (TLR, SEN, recruitment & retention). The Teachers' Pension Scheme deducts 7.4-11.7% from gross pay at source. Private tutoring income above £1,000 trading allowance must be declared via Self Assessment. Union subscriptions (NEU, NASUWT, NAHT, etc.) are deductible. Common claim points: professional subscriptions, course costs to maintain qualifications, home office for marking. McCloud remedy applies to TPS like other public-service schemes.
Teachers' Pension Scheme contributions
Teachers' Pension contributions are tiered by salary, 2026/27 bands:
| Annual salary 2026/27 | Member rate |
|---|---|
| Up to £34,289 | 7.4% |
| £34,290 - £46,158 | 8.6% |
| £46,159 - £54,729 | 9.6% |
| £54,730 - £72,534 | 10.2% |
| £72,535 - £98,908 | 11.3% |
| Over £98,908 | 11.7% |
Pension contribution is taken pre-tax so the net cost is around 70-75% of the gross rate for basic-rate payers. The scheme accrues at 1/57th of pensionable pay per year in the CARE element.
The "career average" benefit accrual
Since April 2015 (or April 2022 for protected pre-2015 members under McCloud remedy), Teachers' Pension is CARE (Career Average Revalued Earnings):
- Each year of pensionable service adds 1/57th of that year's pensionable salary to your pension pot
- Previously-accrued amounts are revalued each April by CPI + 1.6%
- At retirement, you receive the accumulated pension annually for life, plus 25% as tax-free lump sum (subject to the Lump Sum Allowance £268,275)
For a teacher working 35 years at an average pensionable salary of £40,000, the accrued pension ≈ £24,560 per year — payable from State Pension Age. For most teachers, this dwarfs any private SIPP you could realistically build.
Private tutoring income
If you tutor privately, the income is self-employment income subject to:
- £1,000 trading allowance: if tutoring income is under £1,000/year, no need to declare (and no SA registration).
- Self Assessment registration: required if tutoring income exceeds £1,000. Use online registration at gov.uk.
- Class 4 NI: 6% above £12,570 and 2% above £50,270 (combined with teaching salary).
- Expenses: deductible against tutoring income — books, materials, advertising costs, mileage if travelling to students, home office (£6/week simplified).
Common pitfall: teachers think tutoring "doesn't count" if paid in cash. HMRC's view: all UK trading income is taxable, regardless of payment method. The trading allowance is the threshold — not the tax-free zone.
Allowances — TLR, SEN, R&R
UK teachers receive several pensionable and non-pensionable allowances:
- TLR (Teaching and Learning Responsibility): TLR1 £8,755 - £14,809, TLR2 £3,033 - £7,418 (2026/27). Pensionable, taxable through PAYE.
- SEN allowance: £2,679 - £5,285 for specialist roles. Pensionable.
- Recruitment & Retention allowance: discretionary, varies by school and authority. Often non-pensionable.
- Acting headship payment: for temporary leadership roles.
The risk: a teacher on £45,000 basic + £8,000 TLR1 + £5,000 SEN allowance is on £58,000 — well into higher-rate. Many teachers in promoted roles don't realise they've crossed the threshold.
Deductible expenses for teachers
| Expense | Typical | Notes |
|---|---|---|
| NEU / NASUWT / NAHT subscription | £150-£250/year | Deductible via Self Assessment or P87 |
| Subject association membership | £40-£100 | If on HMRC List 3 |
| NPQ (Headship / Senior Leadership) | £2,000+ if self-funded | Deductible to maintain skills |
| DBS update service subscription | £13/year | If required for current role |
| Home office / marking flat rate | £312/year | £6/week simplified, if home is workplace for part-time work |
| Mileage between schools (multi-site) | Varies | AMAP rates |
| Specialist equipment | Varies | If solely for work use |
Critical: classroom supplies you've personally paid for (resources, decorations) are usually NOT deductible because the school could have provided them — they fail the "wholly, exclusively and necessarily" test.
Summer pay — academies vs LA-maintained
How summer holiday pay is treated varies:
- LA-maintained schools: teachers are usually paid 1/12th of annual salary each month, including August. Tax is even.
- Some academies / MATs: term-time-only contracts pay only during teaching weeks. Annual salary divided by ~39 working weeks, paid weekly or fortnightly. Either no pay in August, or salary "spread" over 12 months for cash flow.
- Supply teachers: typically term-time-only with no summer pay. Some supply agencies use umbrella structures that can affect tax efficiency.
The tax treatment is the same — annual income is annual income — but cash flow varies. Use our tax calculator with annual salary to model regardless of payment frequency.
Worked example: HoD with TLR and tutoring
Ms B is a head of department on £52,000 + £6,000 TLR1 = £58,000 pay. She tutors privately for £3,500/year.
- Pensionable pay: £58,000
- TPS contribution: 10.2% × £58,000 = £5,916 (pre-tax)
- Taxable employment income: £52,084
- Tutoring profit (after £1,000 trading allowance): £2,500
- Total taxable income: £54,584
- Income tax: (54,584 - 12,570) × 20% on first £37,700 + 40% on £4,314 = £9,266
- Class 4 NI on tutoring: 6% of £2,500 = £150
- Deductible: NASUWT £210, subject association £60, total £270. Tax saving at 40% on the £270 over higher-rate threshold (or 20% on basic portion).
- Net take-home: approximately £37,500
Common teacher tax mistakes
- Not declaring tutoring income. Cash payments are still taxable. HMRC's bank-data-sharing programme picks up multiple unexplained deposits.
- Forgetting to deduct union subscription. Quick win — £30-£60 of tax savings per year.
- TLR pushes into higher-rate band without realising. Plan accordingly — salary sacrifice into pension can claw it back.
- Claiming classroom expenses that fail HMRC tests. Resources the school could have provided don't qualify.
- Not engaging with McCloud remedy choices. The 2015-2022 remedy period choice can affect retirement benefits significantly.
Sources
Related profession-specific guides
How UK Tax Drag holds itself to account
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