SD3 Tax Code in Scotland Explained (2026-27)
SD3 is a Scottish flat-rate code: all income from this job or pension is taxed at Scotland's top rate of 48%, with no Personal Allowance. The top rate applies above £125,140 in 2026-27, the point at which the Personal Allowance has fully tapered away. SD3 is the highest PAYE code a Scottish taxpayer can receive, 3 points above England's D1 code (45%).
What does tax code SD3 mean?
Tax code SD3 taxes all income from this source at 48%, Scotland's top rate, with no Personal Allowance. It is 3 points above England's D1 code (45%) and applies when your other income already exceeds £125,140.
Who gets tax code SD3?
Scottish residents whose other income already exceeds £125,140, so this additional source is taxed in full at 48%. It is rare and usually seen on a second salary, a bonus paid through a separate payroll or a pension drawn while still working at a high salary.
Scottish Income Tax: Scotland sets its own income tax rates via the Scottish Parliament. For 2026-27, the Starter Rate (19%) applies from £12,571-£14,876, the Intermediate Rate (21%) applies from £26,562-£43,662, and the Higher Rate (42%) applies from £43,663-£75,000, significantly higher than England's 40% which starts at £50,270. National Insurance is the same across all UK regions.
Take-home pay on tax code SD3, Scotland 2026-27 examples
Examples below show Scottish Income Tax and take-home pay at common salary levels. NI applies on the same basis for all UK employees regardless of region.
| Gross Salary | Scottish IT | NI (est.) | Take-Home | Effective IT Rate |
|---|---|---|---|---|
| £20,000 | £9,600 | £594 | £9,806 | 48.0% |
| £25,000 | £12,000 | £994 | £12,006 | 48.0% |
| £30,000 | £14,400 | £1,394 | £14,206 | 48.0% |
| £35,000 | £16,800 | £1,794 | £16,406 | 48.0% |
| £40,000 | £19,200 | £2,194 | £18,606 | 48.0% |
| £45,000 | £21,600 | £2,594 | £20,806 | 48.0% |
| £50,000 | £24,000 | £2,994 | £23,006 | 48.0% |
| £60,000 | £28,800 | £3,211 | £27,989 | 48.0% |
| £75,000 | £36,000 | £3,511 | £35,489 | 48.0% |
| £100,000 | £48,000 | £4,011 | £47,989 | 48.0% |
Take-home = Gross − Scottish Income Tax − National Insurance. No pension, student loan or other deductions. NI: 8% between £12,570-£50,270 and 2% above.
Scottish income tax bands 2026-27
| Band | Rate | Income range |
|---|---|---|
| Starter Rate | 19% | £12,571-£16,537 |
| Basic Rate | 20% | £16,538-£29,526 |
| Intermediate Rate | 21% | £29,527-£43,662 |
| Higher Rate | 42% | £43,663-£75,000 |
| Advanced Rate | 45% | £75,001-£125,140 |
| Top Rate | 48% | £125,141-no upper limit |
Tax code SD3 vs S1257L: take-home comparison
How much more or less you take home on SD3 compared to the standard S1257L code at the same gross salary. A negative number means less take-home pay.
| Gross Salary | S1257L Take-Home | SD3 Take-Home | Difference |
|---|---|---|---|
| £20,000 | £17,948 | £9,806 | -£8,142 |
| £25,000 | £21,548 | £12,006 | -£9,542 |
| £30,000 | £25,123 | £14,206 | -£10,917 |
| £35,000 | £28,673 | £16,406 | -£12,267 |
| £40,000 | £32,223 | £18,606 | -£13,617 |
| £45,000 | £35,492 | £20,806 | -£14,686 |
| £50,000 | £37,992 | £23,006 | -£14,986 |
| £60,000 | £43,575 | £27,989 | -£15,586 |
| £75,000 | £51,975 | £35,489 | -£16,486 |
| £100,000 | £65,225 | £47,989 | -£17,236 |
Both columns include Scottish Income Tax and National Insurance. No pension or student loan deductions. S1257L = standard Scottish Personal Allowance of £12,570.
If you have tax code SD3, here's what you should know
- Your S-prefix tax code confirms you are coded as a Scottish resident for income tax purposes. HMRC uses your residential address to determine this.
- Your employer uses this code to deduct Scottish Income Tax, they follow HMRC's instructions and cannot change your code themselves.
- If you have recently moved to or from Scotland, contact HMRC to ensure your code is updated. An incorrect residence determination means wrong tax rates applied.
- You can view and update your tax code via your Personal Tax Account at gov.uk.
- If you think your code is wrong, contact HMRC on 0300 200 3300 or use the HMRC app.
Frequently asked questions
What does tax code SD3 mean?
SD3 is a Scottish flat-rate code: all income from this job or pension is taxed at Scotland's top rate of 48%, with no Personal Allowance. The top rate applies above £125,140 in 2026-27, the point at which the Personal Allowance has fully tapered away. SD3 is the highest PAYE code a Scottish taxpayer can receive, 3 points above England's D1 code (45%).
Who gets tax code SD3?
Scottish residents whose other income already exceeds £125,140, so this additional source is taxed in full at 48%. It is rare and usually seen on a second salary, a bonus paid through a separate payroll or a pension drawn while still working at a high salary.
How much do I take home on tax code SD3 earning £30,000 in Scotland?
On tax code SD3 with a £30,000 salary in Scotland, you take home £14,206 per year (£1,184 per month) after Scottish Income Tax of £14,400.
Is tax code SD3 correct for me?
Your Scottish tax code is set by HMRC based on your individual circumstances and Scottish residence. If you believe your code is wrong, contact HMRC on 0300 200 3300 or check your Personal Tax Account at gov.uk. An incorrect code could mean you are paying too much or too little Scottish Income Tax.
Want to see your exact Scottish take-home pay with your real salary, pension, and student loan?
Use the Scotland salary calculator →