Understanding your take-home pay
Your take-home pay – often called net pay – is what actually reaches your bank account after your employer has deducted everything it is legally required to deduct, plus anything you have agreed to, such as pension contributions. The headline salary in a job advert is the gross figure. The gap between the two can be large, and it grows as you earn more, which is why a calculator built on the current tax year's rules is useful when you compare job offers, plan a budget or check a payslip.
This calculator applies the rules for the 2026/27 tax year, which runs from 6 April 2026 to 5 April 2027. All thresholds and rates come from official sources: GOV.UK Income Tax rates, GOV.UK Scottish Income Tax, HMRC National Insurance rates and allowances and GOV.UK student loan repayments.
The four main deductions
1. Income Tax
Most people have a tax-free Personal Allowance of £12,570. In England, Wales and Northern Ireland, taxable income above that is charged at 20% (basic rate) up to £50,270, 40% (higher rate) up to £125,140, and 45% (additional rate) beyond. If your adjusted net income is over £100,000, your Personal Allowance falls by £1 for every £2 above that level, disappearing completely at £125,140. That taper creates an effective marginal rate of 60% on income between £100,000 and £125,140 – one of the most important quirks of the UK system to understand.
If you live in Scotland, Scottish Income Tax applies to your earnings instead. For 2026/27 there are six bands above the Personal Allowance: starter (19%), basic (20%), intermediate (21%), higher (42%), advanced (45%) and top (48%). Choose “Scotland” in the calculator to apply them. Where you live, not where your employer is based, decides which system you pay under.
2. National Insurance
Employees pay Class 1 National Insurance on earnings above the Primary Threshold (£12,570 a year, or £1,048 a month). For 2026/27 the main rate is 8% up to the Upper Earnings Limit of £50,270, and 2% on earnings above it. National Insurance is worked out on each pay period separately rather than over the year, so people with irregular pay – for example a large bonus in one month – can pay a slightly different amount than an annual calculation suggests. Employers also pay their own National Insurance (15% above £5,000 a year for 2026/27), but that does not come out of your pay.
3. Student loan repayments
If you have a student loan, repayments are taken through payroll once your income passes your plan's threshold. For 2026/27 the yearly thresholds are £26,900 (Plan 1), £29,385 (Plan 2), £33,795 (Plan 4), £25,000 (Plan 5) and £21,000 (Postgraduate Loan). You repay 9% of income above the threshold on Plans 1, 2, 4 and 5, and 6% above the threshold on a Postgraduate Loan. If you hold a Postgraduate Loan as well as an undergraduate plan, both repayments are taken.
4. Pension contributions
Under automatic enrolment, most employees aged 22 or over who earn more than £10,000 a year are put into a workplace pension. Contributions are commonly taken as a percentage of pay. How they affect your take-home pay depends on how the scheme works:
- Net pay arrangement – contributions are taken before Income Tax is calculated, so you get tax relief straight away, but National Insurance is still charged on your full salary.
- Salary sacrifice – you formally give up part of your salary in exchange for an employer contribution. Because your contractual pay is lower, you save both Income Tax and National Insurance.
- Relief at source – contributions come from your net pay and the pension provider claims basic-rate relief from HMRC. This calculator treats this like a net pay arrangement for simplicity, so results may differ slightly.
How to use the calculator
- Enter your annual gross salary – before any deductions, including regular overtime if you want a typical year.
- Select where you live: England, Wales and Northern Ireland, or Scotland.
- Choose your student loan plan(s), if any. Your plan type is shown on your payslip or in your online repayment account.
- Add your pension contribution as a percentage of salary and choose the type of arrangement.
- Pick how you want results shown – yearly, monthly, weekly or daily – then press Calculate.
Worked example
Take a salary of £50,000 in England with no student loan or pension contribution. The first £12,570 is covered by the Personal Allowance, leaving £37,430 taxed at 20%, which is £7,486 of Income Tax. National Insurance is 8% of the same £37,430, which is £2,994.40. Take-home pay is therefore £39,519.60 a year, or about £3,293 a month. If the same person contributes 5% to a pension through salary sacrifice, both the tax and the National Insurance bills fall because their contractual pay drops to £47,500.
Why your payslip may differ
A calculator gives a reliable estimate for a standard situation, but real payslips can differ for good reasons:
- Tax code – if HMRC has adjusted your code (for example for company benefits, unpaid tax from an earlier year or Marriage Allowance), your tax-free amount will not be £12,570. Check your code on your payslip or in your personal tax account.
- Emergency tax – a new job without a P45 can mean a temporary code that over- or under-collects until HMRC catches up.
- Benefits in kind such as a company car or private medical insurance.
- Pay frequency and timing – National Insurance and student loan repayments are calculated per pay period.
- Other deductions such as union fees, give-as-you-earn charitable donations or cycle-to-work schemes.
Ways to keep more of what you earn
There is no trick to avoid tax legitimately owed, but several allowances exist precisely so that people use them. Increasing pension contributions – especially via salary sacrifice – reduces taxable pay and builds retirement savings. If you earn between £100,000 and £125,140, additional pension contributions can restore some of your tapered Personal Allowance. Couples where one partner earns less than the Personal Allowance may be able to claim Marriage Allowance. Interest earned on savings has its own Personal Savings Allowance, and ISAs shelter savings and investments from tax altogether. Our guides explain each of these in detail.
These results are estimates for guidance only and do not constitute financial or tax advice. For decisions with significant consequences, check your figures with HMRC's own tools or a qualified adviser.