The Scottish Government has published their Budget for 2026–27, setting out spending priorities and tax measures relevant to employers, payroll teams, HR functions and global mobility programmes. While many tax powers remain reserved to Westminster, Scottish specific measures and wider economic signals affect workforce planning and payroll compliance in Scotland.
Scottish Income Tax Bands and Rates
Scotland applies its own income tax bands and rates for non-savings and non-dividend income, which differ from the rest of the UK. For 2026-27, the Basic and Intermediate rate thresholds will rise by 7.45%, increasing the point at which higher rates of tax apply. Accurate identification of Scottish taxpayers remains essential for payroll compliance.
Key points:
Other Considerations and Implications:
Interactions with UK Level Tax and Employment Measures
The Scottish Budget should be considered alongside recent UK fiscal announcements, which also affect employers in Scotland. Key points include:
Payroll, Compensation and Employer Considerations
Scottish tax divergence and UK wide employment changes mean employers in Scotland need careful planning and coordination across payroll, HR and mobility teams.
Key considerations:
Preparation and alignment between payroll, HR and mobility teams will help maintain compliance, manage costs and support employee experience.
How activpayroll can help
At activpayroll, we help organisations manage the practical effects of tax, payroll and mobility changes across jurisdictions. Whether you need guidance on Scottish tax, payroll systems or reward frameworks for mobile staff, our team can provide support.
Please complete our Contact Us form, or reach out to Steph Smith, our Head of Global Mobility, to discuss how we can support your organisation in responding to the Scottish Budget 2026-27 and wider payroll and mobility issues.