It means Scotland’s has a significantly different system from the rest of the UK, where four bands are in place.
The changes unveiled by Mr Mackay in today’s budget mean and additional 24,000 workers will now pay the Higher rate of 41pence in the pound. This kicks in at a salary of £43,430 after Mr Mackay froze this, instead of pushing it up in line with inflation.
In England, workers only start paying this rate on a salary of £50,000 and it is set at 40 pence.
However, Mr Mackay insists that 99% of taxpayers will pay no more in tax than they did last year as the personal allowance is also going up. Only those on salaries of £124,000 will actually pay more in tax in Scotland. He has not put up taxes - it is the UK Government which has cut them for high and middle earners.
At a time of ongoing austerity and the uncertainty of Brexit, the Scottish Government says this is the time to be dishing out tax break to those making a bit more. Business leaders have voiced fears it could prevent them attracting talented staff north of the border.
The Scottish system does mean a greater tax burden on the Scottish workforce as a whole. A majority of workers pay less, but high earners pay more - and quote a bit more depending on high their salary is. This is seen as being more progressive.
The changes today mean that a salary of about £27,000 is effectively cut-off. Above this, Scots workers start paying more in tax than elsewhere in the UK. Below it you pay less. At the moment a small majority of Scots (55%) pay less in tax than they would if they lived elsewhere in the UK.
In addition to this, the Scottish Government also points to the fact that council tax rates are lower on average in Scotland. Universal benefits such as free university education, personal care for the elderly and prescriptions are also a hit with Scots, according to polling.
Nonetheless someone earning £45,000 in Scotland will pay £494 more a year in tax compared with someone on the same pay south of the border.
Mr Mackay insisted today he has seen no evidence that the Scottish Government’s income tax policy is having any impact on economic growth. But the First Minister’s Council of Economic Adviser’s is to look into the issue in its future work and the issue will kept under review.