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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A New York VS COUNTRY B UK

Side-by-side analysis of income tax, effective rates, and take-home pay for New York and UK in 2026.

Daniel · CountryTaxCalc Updated October 2026 Tax Comparison 2026
Calculate your take-home → See all comparisons →
OVERVIEW
The New York to London migration is one of the most common finance and banking moves in the world — and the tax comparison is crucial. New York state income tax at $100,000 is approximately $4,861, while UK national income tax on equivalent earnings is roughly $23,700 USD. The UK costs significantly more on national income tax alone. However, New York residents also pay US federal tax (~$13,170 at $100K for a single filer), bringing total NY state-plus-federal burden to ~$18,031 — about $5,600 below UK national income tax. Americans moving from New York to London still file US federal tax returns annually — the IRS taxes worldwide income regardless of where you live. The US-UK tax treaty provides foreign tax credits that typically prevent true double taxation, meaning you pay the higher of the two rates rather than both. London salaries in finance often compensate for higher tax rates, but the comparison is tighter than most New Yorkers expect.
Section 01

The Big Picture

Top-line rates and effective take-home for a typical earner — including income tax, social contributions, and applicable surcharges.

🗽
COUNTRY A
New York
TAX RATE
3.9–10.9%
High Income Tax State

9 tax brackets from 3.9% to 10.9%

🇬🇧
COUNTRY B
UK
TAX RATE
20–45%
Progressive Tax System

Basic rate 20%, higher rate 40%, additional rate 45%

TYPICAL ANNUAL DIFFERENCE
Moving from New York → UK at $100,000
$18,801

New York state income tax ($4,861) is lower than UK national income tax (~$23,700) at $100,000. However, NY residents also pay US federal tax — total NY (state + federal) of ~$18,031 is about $5,600 below UK national tax alone. US expats in the UK use foreign tax credits to avoid double taxation.

Section 02

Tax Savings by Income Level

Net take-home after all income tax, social contributions, and surcharges — for a single employee with no dependents.

GROSS INCOME
🗽 NY TAX
🇬🇧 GB TAX
SAVINGS
10-YEAR
$50,000
$2,103
$6,732
-$4,629 UK costs more
-$46,290
$75,000
$3,453
$13,662
-$10,209 UK costs more
-$102,090
$100,000
$4,861
$23,662
-$18,801 UK costs more
-$188,010
$150,000
$8,291
$47,662
-$39,371 UK costs more
-$393,710
$250,000
$15,947
$94,564
-$78,617 UK costs more
-$786,170
💡

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🗽

New York Pros & Cons

+ PROS
  • State income tax much lower than UK national rates
  • World's largest financial market access
  • Higher USD compensation in finance and tech
  • No VAT (sales tax ~8.875% NYC)
− CONS
  • High state income tax (up to 10.9%)
  • Plus US federal tax on top (10-37%)
  • NYC city income tax adds 3.078-3.876% on top
  • Extremely high cost of living in NYC
🇬🇧

UK Pros & Cons

+ PROS
  • NHS universal healthcare included
  • Strong financial regulation and legal system
  • Closer to European markets
  • Foreign tax credits prevent double taxation for Americans
− CONS
  • National income tax 20-45% (far higher than NY state alone)
  • 20% VAT on most goods
  • 60% effective rate trap between £100K-£125K
  • Americans must continue filing US returns annually
FAQ

Frequently Asked Questions

Will I still pay US taxes if I move from New York to the UK?

Yes. All US citizens and green card holders must file a US federal tax return regardless of where they live. Moving from New York to the UK eliminates your New York state tax obligation (once you establish non-residency) but does not remove your US federal tax liability. The US-UK tax treaty and foreign tax credits typically prevent double taxation — you pay the higher of the two rates, not both in full.

Does New York State tax you after you move to the UK?

New York is one of the most aggressive states for taxing departing residents. The New York Department of Taxation looks at where you are domiciled and, separately, at statutory residency (a permanent place of abode in New York plus more than 183 days in the state). Simply moving to the UK does not automatically terminate New York tax residency. You must change your domicile to the UK, and you must also avoid statutory residency by not keeping a permanent place of abode in New York or by spending 183 days or fewer there.

How does NYC compare to London for finance workers?

Both are world-leading financial centres with comparable salaries at the senior level. NYC finance workers pay New York state tax (up to 10.9%) + NYC city tax (up to 3.876%) + federal (up to 37%) — a combined marginal rate that can exceed 50% at very high incomes. London finance workers pay UK national income tax (up to 45%) with no additional city tax, but face the 60% trap between £100K-£125K. At $250K, UK income tax (~$94,600) is still higher than US federal + NY state + NYC income tax combined (roughly $76,500, NYC estimated from its published rate schedule), before payroll taxes.

What is the UK's 60% tax trap and does it affect New Yorkers?

Between £100,000 and £125,140, UK taxpayers lose their £12,570 personal allowance at a rate of £1 for every £2 earned. This creates a 60% effective marginal rate in that band — equivalent to roughly $130,000-$163,000 USD at about $1.30 per £. New Yorkers earning in this range who move to London will face this trap, which is not present in New York's tax system.

What is the FEIE and how does it work for New York expats in the UK?

The Foreign Earned Income Exclusion (FEIE, IRS Form 2555) allows qualifying US expats to exclude up to $132,900 (2026) of foreign earned income from US federal tax. However, for UK-based Americans where UK tax rates often exceed US rates, it's generally more beneficial to use the Foreign Tax Credit instead of the FEIE — crediting UK taxes paid directly against US liability.

Is it worth moving from New York to London for tax reasons alone?

Rarely, based on income tax alone. UK national income tax is higher than New York state income tax at all income levels. Total US burden (NY state + federal) is about $5,600 below UK national tax at $100K, though it does not include NYC city tax, which makes NYC one of the highest-taxed locations in the US. The decision is usually driven by career opportunity, lifestyle, and proximity to family rather than tax optimization.

Does the UK have National Insurance I need to pay as a US expat?

Employed workers in the UK pay National Insurance: 8% on earnings between £12,570 and £50,270, and 2% above. However, a US-UK totalization agreement means you generally won't pay into both Social Security and National Insurance simultaneously — you'll contribute to one system depending on your employment situation.
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