What is take-home pay?
Take-home pay (also called net pay) is what is left of your gross salary after your employer has made the deductions required by law and any you have agreed to. In the UK the main deductions are Income Tax, National Insurance contributions (NI), your workplace pension contribution and, if you have one, a student loan repayment.
Your employer deducts all of these through PAYE (Pay As You Earn) before your wages are paid, so most employees never need to file a tax return. This calculator reproduces the same annual calculation so you can see where every pound of your salary goes, compare job offers, or check a payslip.
Income Tax rates and bands for 2026/27
Everyone gets a tax-free Personal Allowance of £12,570. Income above it is taxed in bands. The thresholds below apply in England, Wales and Northern Ireland for the tax year 6 April 2026 to 5 April 2027; they have been frozen at these levels and are currently planned to stay frozen for several more years.
If your adjusted net income is over £100,000, your Personal Allowance is reduced by £1 for every £2 above that limit, so it disappears completely at £125,140. This taper creates an effective marginal tax rate of 60% on income between £100,000 and £125,140.
- Scotland has its own Income Tax bands (starter, basic, intermediate, higher, advanced and top rates). This calculator uses the England, Wales and Northern Ireland bands, so Scottish taxpayers (tax codes starting with S) will see a different Income Tax figure. National Insurance and student loan rules are the same across the UK.
- Welsh taxpayers (tax codes starting with C) currently pay the same rates as England.
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
National Insurance and student loan thresholds for 2026/27
Employees pay Class 1 National Insurance on earnings above the Primary Threshold. Unlike Income Tax, NI is worked out on your gross pay before a net-pay-arrangement pension is taken off, and there is no taper.
Student loan repayments are a percentage of your income above the threshold for your plan. If you have both an undergraduate plan and a Postgraduate Loan, you repay both at the same time; this calculator handles one plan at a time.
| Deduction | Threshold (per year) | Rate |
|---|---|---|
| National Insurance (main rate) | £12,570 to £50,270 | 8% |
| National Insurance (above Upper Earnings Limit) | Over £50,270 | 2% |
| Student loan Plan 1 | Over £26,900 | 9% |
| Student loan Plan 2 | Over £29,385 | 9% |
| Student loan Plan 4 (Scotland) | Over £33,795 | 9% |
| Student loan Plan 5 | Over £25,000 | 9% |
| Postgraduate Loan | Over £21,000 | 6% |
How the calculation works, step by step
The calculator follows the same order as a payroll system, using annual figures and then dividing by 12 for the monthly view:
- 1. Pension: pension = gross salary × your pension %. Under a net pay arrangement this is deducted before Income Tax, so you get tax relief at your highest rate automatically.
- 2. Personal Allowance: £12,570, reduced by half of any income (after pension) above £100,000.
- 3. Taxable income: gross − pension − Personal Allowance.
- 4. Income Tax: 20% on the first £37,700 of taxable income, 40% on taxable income up to £125,140, 45% above that.
- 5. National Insurance: 8% of gross pay between £12,570 and £50,270, plus 2% of anything above £50,270.
- 6. Student loan: plan rate × (gross pay − plan threshold), if positive.
- 7. Take-home pay: gross − pension − Income Tax − NI − student loan.
- In net to gross mode the calculator repeats this calculation, trying different salaries until the take-home pay matches the figure you entered.
Worked example 1: £35,000 salary, 5% pension, Plan 2 loan
Gross salary £35,000 a year, 5% pension, Plan 2 student loan
Pension = £35,000 × 5% = £1,750
Income after pension = £35,000 − £1,750 = £33,250
Taxable income = £33,250 − £12,570 = £20,680
Income Tax = £20,680 × 20% = £4,136
National Insurance = (£35,000 − £12,570) × 8% = £1,794.40
Plan 2 student loan = (£35,000 − £29,385) × 9% = £505.35
Take-home pay = £35,000 − £1,750 − £4,136 − £1,794.40 − £505.35 = £26,814.25 a year, or £2,234.52 a month
Worked example 2: £60,000 salary, higher-rate taxpayer
Gross salary £60,000 a year, 5% pension, no student loan
Pension = £60,000 × 5% = £3,000; income after pension = £57,000
Taxable income = £57,000 − £12,570 = £44,430
Basic rate: £37,700 × 20% = £7,540
Higher rate: (£44,430 − £37,700) × 40% = £6,730 × 40% = £2,692
Income Tax = £7,540 + £2,692 = £10,232
NI = (£50,270 − £12,570) × 8% + (£60,000 − £50,270) × 2% = £3,016 + £194.60 = £3,210.60
Take-home pay = £60,000 − £3,000 − £10,232 − £3,210.60 = £43,557.40 a year, or £3,629.78 a month
Worked example 3: £110,000 salary and the Personal Allowance taper
Gross salary £110,000 a year, 5% pension, no student loan
Pension = £5,500; income after pension = £104,500
Personal Allowance = £12,570 − (£104,500 − £100,000) ÷ 2 = £12,570 − £2,250 = £10,320
Taxable income = £104,500 − £10,320 = £94,180
Income Tax = £37,700 × 20% + (£94,180 − £37,700) × 40% = £7,540 + £22,592 = £30,132
NI = £3,016 + (£110,000 − £50,270) × 2% = £3,016 + £1,194.60 = £4,210.60
Take-home pay = £70,157.40 a year, or £5,846.45 a month
Tip: increasing the pension contribution until income after pension is £100,000 would restore the full allowance and save tax at an effective 60%.
Worked example 4: what salary gives £2,500 a month?
Net to gross: target take-home pay £2,500 a month, 5% pension, no student loan
Target net pay = £2,500 × 12 = £30,000 a year
The calculator searches for the gross salary that leaves exactly that amount
Result: a gross salary of about £38,941.75 a year (£3,245.15 a month)
Breakdown: pension £1,947.09, Income Tax £4,884.93, NI £2,109.74, leaving £30,000 a year
Assumptions and what this calculator does not cover
- Tax code 1257L on a cumulative basis. An emergency code (1257L W1/M1 or 0T), a K code or a code adjusted for underpaid tax will change your Income Tax.
- Net pay arrangement pension: contributions are taken before Income Tax but not before NI. With relief at source (common with some personal and group pensions), the provider claims basic-rate relief instead; your take-home pay is broadly similar for basic-rate taxpayers.
- Salary sacrifice is different: your contractual salary is reduced, so you save National Insurance as well as Income Tax, and your student loan repayment may fall. If you use salary sacrifice, enter the reduced salary and set pension to 0% for a closer estimate.
- No benefits in kind (company car, private medical insurance), no bonuses, overtime, commission or salary changes during the year.
- Repayments are worked out on annual pay. Payroll calculates student loan and NI per pay period, so irregular pay can give slightly different totals.
- The Marriage Allowance, Blind Person's Allowance, Gift Aid and other reliefs are not included.
Common mistakes and useful tips
- Thinking a pay rise into a higher band taxes all your income at 40%. Only the part above £50,270 is taxed at the higher rate; a rise always increases take-home pay (except for some benefit and childcare effects).
- Forgetting the £100,000 trap. Between £100,000 and £125,140 you lose your Personal Allowance and can also lose Tax-Free Childcare and some free childcare hours. Extra pension contributions are the usual way to bring adjusted net income back down.
- Mixing up student loan plans. Check the plan on your Student Loans Company account or payslip; the thresholds differ by thousands of pounds.
- Comparing monthly and annual figures. If you are paid weekly or four-weekly, divide the annual result by 52 or 13 rather than 12.
- Checking your tax code. If your payslip shows a different code, ask HMRC through your personal tax account why; a wrong code is the most common cause of paying too much tax.