Salary Calculator UK

Amara, graduate trainee in Leeds

First job out of university on a Plan 2 loan, not yet enrolled in a pension beyond the statutory minimum she has opted out of.

Inputs: £25,000 a year, England, Plan 2, no pension

Every taxed pound Amara earns sits in the basic-rate band, and her salary is below the Plan 2 threshold, so nothing at all is deducted for the loan. Graduates routinely budget for a repayment that never arrives.

Callum, physiotherapist in Glasgow

Works for a Scottish employer, so his tax code is prefixed S and the Scottish rates apply to all of his employment income.

Inputs: £50,000 a year, Scotland, no pension, no student loan

For comparison, the identical salary in England, Wales or Northern Ireland: Income Tax £7,486.00, take home £39,519.60 — a difference of £1,496.05 a year.

Callum crosses four Scottish bands on the way to his salary. Because Scotland has an extra intermediate band and a 42% higher rate that starts below the UK-wide National Insurance ceiling, he pays noticeably more income tax than the same salary would attract in England.

Priya, software engineer in Manchester

Sacrifices 8% of salary into a workplace pension and is still repaying a Plan 2 loan from a 2016 degree.

Inputs: £85,000 a year, England, 8% salary sacrifice, Plan 2

The sacrifice cuts every payroll figure at once: income tax, National Insurance and the student loan deduction are all worked out on the reduced salary. That last effect is the one most calculators miss.

Tom, sales director in Reading

Sits squarely inside the allowance taper, where each extra pound of salary quietly removes 50p of Personal Allowance.

Inputs: £110,000 a year, England, no pension

For comparison, the same salary with a 10% salary sacrifice: Income Tax £27,032.00, take home £67,977.40 — a difference of £4,380.00 a year.

Tom keeps only about 40p of his next pound of salary. Redirecting the top slice of pay into a pension is the only routine way to step back out of the zone, which is what the comparison row shows.

Assuming your whole salary is taxed at your top rate

A £60,000 earner is a higher-rate taxpayer, but only £9,730 of that salary is taxed at 40%. The rest passes through the allowance and the basic-rate band first. Multiplying gross salary by 40% overstates the bill by more than £12,000.

Dividing by 2,080 to get an hourly rate

That divisor assumes a 40-hour week. The UK full-time norm is 37.5 hours, so the standard shortcut understates a typical worker's true hourly rate by about 7%. Set your contracted hours in the calculator instead — it is the input most take-home tools do not offer.

Treating every pension contribution the same

Salary sacrifice reduces Income Tax, National Insurance and your student loan deduction. Relief at source reduces none of them at the payroll stage: you get 20% back automatically and must claim any higher-rate relief through Self Assessment. On the same 8% contribution the two arrangements produce visibly different take home pay.

Thinking £100,000 is a cliff edge

Nothing happens at £100,000 itself. The allowance withdraws gradually across the £25,140 above it, so earning £100,001 does not suddenly cost you £12,570 of allowance. What is true is that the marginal rate on that whole stretch is 60% in England, Wales and Northern Ireland and 67.5% in Scotland.

Budgeting for a student loan repayment you do not owe

Repayment is 9% of earnings above the threshold, not 9% of salary. A £25,000 salary on Plan 2 (threshold £29,385) repays nothing at all. Conversely, payroll assesses each pay period separately, so a bonus month can trigger a deduction even when your annual earnings sit below the threshold.

Expecting twelve identical payslips

PAYE is cumulative: it recalculates your year-to-date position every period, so a mid-year pay rise, bonus or job change spreads its correction across the months that follow. An emergency or month-1 tax code ignores earlier pay entirely until HMRC catches up. Annual figures like the ones on this page are the right basis for comparison, not the right prediction of any single payslip.

How is take home pay calculated in the UK for the 2026/27 tax year?

Take home pay is gross salary minus Income Tax, employee National Insurance, and any student loan or pension deduction. Income Tax is charged only on income above your Personal Allowance (£12,570 for most people), and then in slices: the first £37,700 of taxable income at 20% in England, Wales and Northern Ireland, the rest at 40% up to £125,140 and 45% above it. National Insurance runs on a separate set of thresholds — 8% between £12,570 and £50,270 of gross pay, and 2% on everything above £50,270. Nothing is deducted twice, and no single rate applies to your whole salary.

What are the UK income tax bands for 2026/27 and how much will I pay?

In England, Wales and Northern Ireland: Personal Allowance up to £12,570 at 0%, basic rate £12,571 to £50,270 at 20%, higher rate £50,271 to £125,140 at 40%, and additional rate above £125,140 at 45%. On a £50,000 salary that works out at £7,486 of Income Tax, because £37,430 of taxable income is charged at 20%. On £85,000 it is £21,432, because £37,700 is charged at 20% and the remaining £34,730 at 40%. Scotland uses six bands of its own, listed in the rates table on this page.

Why is my marginal rate 60% between £100,000 and £125,140, and can salary sacrifice escape it?

Above £100,000 the Personal Allowance is withdrawn by £1 for every £2 of income, so an extra £100 of salary is taxed at 40% and simultaneously pushes another £50 of previously tax-free income into the 40% band. The measured marginal rate is therefore 60% in England, Wales and Northern Ireland, and 67.5% in Scotland where the advanced rate is 45%. Add 2% National Insurance and a 9% student loan and the next pound can cost over 70%. Salary sacrifice is the standard escape: because sacrificed pay is never earnings, contributing enough to bring adjusted salary back under £100,000 restores the full allowance. A £110,000 earner who sacrifices £11,000 gets the whole allowance back and sees roughly 60% of the contribution funded by tax and NI that would otherwise have been paid.

How do Scottish income tax bands differ from the rest of the UK?

Scotland sets its own rates and bands for employment income and has six of them rather than three: starter 19%, basic 20%, intermediate 21%, higher 42%, advanced 45% and top 48%. The 42% higher rate begins at £43,663 of gross income, well below the £50,270 point where UK-wide National Insurance drops from 8% to 2%. That overlap creates a band roughly £43,663 to £50,270 wide where a Scottish taxpayer faces 42% tax and 8% NI at the same time — a 50% marginal rate on that slice. Your Personal Allowance, National Insurance, and student loan rules are identical to the rest of the UK; only the income tax bands change, and they apply if Scotland is your main home, not where your employer is based.

Does a pension contribution reduce my National Insurance as well as my tax?

Only if it is taken by salary sacrifice. Under salary sacrifice you contractually give up part of your salary, so the reduced figure is what payroll reports — Income Tax, employee National Insurance and any student loan deduction are all calculated on it, and your employer saves its own NI too. Under relief at source, the arrangement most personal pensions use, the contribution comes out of pay that has already suffered tax and NI: you hand over 80% of the contribution and the provider reclaims the basic-rate 20% from HMRC. Higher and additional-rate taxpayers must claim the extra relief through Self Assessment, so it never appears on the payslip. This calculator models both, and the difference on the same contribution can be several hundred pounds a year.

How much student loan is taken from my salary?

Nine percent of everything you earn above your plan threshold, or six percent for a Postgraduate Loan — never a percentage of your whole salary. For 2026/27 the annual thresholds are £26,900 on Plan 1, £29,385 on Plan 2, £33,795 on Plan 4, £25,000 on Plan 5 and £21,000 for Postgraduate Loans. On £35,000 with a Plan 2 loan you repay 9% of £5,615, which is £505.35 a year. Payroll assesses each pay period on its own and rounds the deduction down to whole pounds, so an unusual month such as a bonus can trigger a deduction even if your annual earnings are below the threshold.

Why does this not match my payslip exactly?

This calculator models a full, even tax year on a cumulative basis. Real payslips differ for four common reasons. Your tax code may not be the standard 1257L — a benefit in kind, underpaid tax from an earlier year, or the Marriage Allowance all change it. A mid-year pay rise, bonus, or job change means the year is not even, and cumulative PAYE spreads the correction across the remaining months. Emergency or month-1 codes ignore earlier pay entirely until HMRC issues a correction. And employer-specific deductions such as a company car, cycle scheme, childcare, or a net-pay-arrangement pension are not modelled here. Check the tax code on your payslip against HMRC before assuming either figure is wrong.