Take-Home Pay Calculator 2026/27 — UK Salary After Tax
Your gross salary is very different from what lands in your bank account. Four main deductions reduce take-home: Income Tax (Personal Allowance then 20%/40%/45% bands), Class 1 NICs (8% on earnings £12,570–£50,270, 2% above), pension contributions (auto-enrolment minimum is 5% employee + 3% employer), and student loan repayments if applicable.
The Personal Allowance freeze at £12,570 since 2022 means fiscal drag is pushing more workers into higher bands as wages rise.
Gross salary: £45,000/year, standard tax code (1257L), 5% pension, no student loan.
Step 1 — Personal Allowance: £12,570 of income is tax-free. This isn't reduced because £45,000 is under the £100,000 tapering threshold.
Step 2 — Pension contribution: 5% of £45,000 = £2,250/year, deducted before tax under most workplace schemes (salary sacrifice or net pay arrangement), leaving £42,750 as taxable pay before Income Tax bands are applied.
Step 3 — Income Tax: Of the £42,750, the first £12,570 is tax-free. The remaining £30,180 falls in the 20% basic-rate band (up to £50,270): 20% × £30,180 = £6,036 Income Tax.
Step 4 — National Insurance: NI is calculated on gross pay before pension deduction for most schemes (unless salary sacrifice, which reduces the NI-able amount too). On £45,000: the band between £12,570 and £50,270 is charged at 8%: 8% × (£45,000 − £12,570) = £2,594 NI.
Step 5 — Net take-home: £45,000 − £2,250 (pension) − £6,036 (Income Tax) − £2,594 (NI) = £34,120/year, or roughly £2,843/month.
Gross salary: £110,000/year, standard tax code, no pension contribution (for simplicity).
Step 1 — Personal Allowance tapering: once income exceeds £100,000, the £12,570 Personal Allowance is reduced by £1 for every £2 earned above that threshold. At £110,000, that's £10,000 over the threshold: £10,000 ÷ 2 = £5,000 reduction. Personal Allowance falls to £12,570 − £5,000 = £7,570.
Step 2 — Income Tax with the reduced allowance: taxable income is £110,000 − £7,570 = £102,430. The basic-rate band (20%) covers up to £50,270 of gross income — effectively £42,700 of taxable income at 20% = £8,540. The remainder, £59,730, falls in the 40% higher-rate band: 40% × £59,730 = £23,892. Total Income Tax: £32,432.
Step 3 — The effective marginal rate: because losing £1 of allowance for every £2 earned effectively adds an extra 20% tax on top of the 40% band, income between £100,000 and £125,140 is taxed at an effective 60% marginal rate — often called the “60% tax trap.” This is why many people in this range increase pension contributions to bring taxable income back under £100,000.
Step 4 — National Insurance: 8% on income between £12,570 and £50,270 (£3,016), plus 2% on everything above £50,270 (2% × £59,730 = £1,195). Total NI: £4,211.
Step 5 — Net take-home: £110,000 − £32,432 (Income Tax) − £4,211 (NI) = £73,357/year, or roughly £6,113/month. See the full breakdown of this trap on our £100k Tax Trap guide.
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How to Calculate Your Take-Home Pay in the UK
Understanding your take-home pay is essential for budgeting, negotiating job offers, and planning your finances. This calculator breaks down exactly how much of your salary goes to Income Tax, National Insurance, pension contributions, and student loan repayments — so you know precisely what lands in your bank account each month.
What deductions come out of your salary?
Every employed worker in the UK sees several deductions on their payslip. Income Tax is calculated using your tax code and the current tax bands — 20% for basic rate, 40% for higher rate, and 45% for additional rate earners. National Insurance is separate from Income Tax and funds the State Pension, NHS, and unemployment benefits. For 2026/27, employed workers pay 8% NICs on earnings between £12,570 and £50,270, and 2% above that.
If you contribute to a workplace pension, that comes out too — but with tax relief meaning every £100 contribution only costs a basic rate taxpayer £80 from their take-home pay. Student loan repayments apply if you earn above your plan's threshold: Plan 2 starts at £29,385, Plan 5 at £25,000, and the postgraduate loan at £21,000.
Why your tax code matters
Your tax code determines how much tax-free income you get. The standard 1257L code gives you the full £12,570 personal allowance. If HMRC issues an emergency tax code (BR, 0T, or W1/M1), you could be overpaying by hundreds of pounds per month. Always check your tax code when starting a new job. Use our Tax Code Checker to decode yours.
How to use this calculator
Enter your gross annual salary, select your pension contribution percentage, choose your student loan plan, and optionally adjust your tax code. The calculator instantly shows your annual and monthly take-home pay, plus a complete breakdown of every deduction. Use the advanced options to factor in bonuses, overtime, salary sacrifice, or childcare vouchers.
💡 What You Should Do Next
Based on your calculation, here are actionable steps to improve your financial position:
- Check your tax code is correct — A wrong tax code can cost you hundreds. Use our Tax Code Checker to verify.
- Consider salary sacrifice pension — Switching to salary sacrifice saves both Income Tax AND National Insurance.
- Claim Marriage Allowance if eligible — If your partner earns under £12,570, you could save £252/year. Check eligibility.
- Track your student loan — See how much you will actually repay with our Student Loan Calculator.
These are general suggestions based on common scenarios. For personalised advice, speak to a regulated financial adviser or accountant.
How UK Take-Home Pay Is Calculated
Your payslip deductions follow a strict order set by HMRC. Understanding this order helps you spot errors and plan your finances accurately.
| Step | Deduction | 2026/27 Rule |
|---|---|---|
| 1 | Pension (Salary Sacrifice) | Deducted before tax. Reduces taxable income. |
| 2 | Personal Allowance | £12,570 tax-free (tapered above £100,000) |
| 3 | Income Tax | 20% / 40% / 45% on remaining income |
| 4 | National Insurance | 8% on £12,570-£50,270; 2% above |
| 5 | Student Loan | 9% (Plan 1-5) or 6% (Postgrad) above threshold |
| 6 | Pension (Relief at Source) | Contributed from net pay; tax relief claimed by provider |
Salary sacrifice is the most tax-efficient pension method because it reduces both your taxable income AND your National Insuranceable earnings. A £100/month sacrifice saves you £20 Income Tax + £8 NI = £28 total, meaning it only "costs" you £72 from take-home pay.
Frequently Asked Questions
Why is my take-home pay different from this calculator?
What is a K tax code and how does it affect pay?
Do pension contributions reduce my student loan repayments?
What happens when I earn over £100,000?
Real-World Salary Examples (2026/27)
See how different salaries, pension contributions and student loans affect your actual take-home pay. These examples use the standard 1257L tax code.
Example 1: Recent Graduate on £28,000 (Plan 2 Student Loan)
- Gross salary: £28,000
- Personal allowance: £12,570 (no taper)
- Taxable income: £15,430
- Income Tax (20%): £3,086
- National Insurance (8%): £1,554
- Student Loan Plan 2 (9% above £29,385): £0 (below threshold)
- Take-home pay: £23,360/year (£1,947/month)
- Effective tax rate: 16.6%
Tip: At £28,000 you are £1,385 below the Plan 2 student loan threshold of £29,385. Once your salary passes that threshold, you repay 9% of everything above it — for example, on a £30,000 salary you would repay £55.35/year.
Example 2: Mid-Level Manager on £55,000 (5% Pension, No Student Loan)
- Gross salary: £55,000
- Pension contribution (5%): £2,750 (reduces taxable income)
- Taxable income: £39,680
- Income Tax: £5,594 (mix of 20% and 40% bands)
- National Insurance: £3,021
- Take-home pay: £43,635/year (£3,636/month)
- Effective tax rate: 20.7%
Tip: Increasing pension to 10% (£5,500) would save £1,100 in Income Tax + £220 in NI = £1,320 total tax savings, while only reducing take-home by £4,180.
Example 3: Senior Professional on £110,000 (Tapered Allowance)
- Gross salary: £110,000
- Personal allowance: £7,070 (tapered: £12,570 - £5,500)
- Taxable income: £102,930
- Income Tax: £32,382 (20% + 40% bands)
- National Insurance: £4,599
- Take-home pay: £73,019/year (£6,085/month)
- Effective tax rate: 33.6%
Critical tip: Between £100,000 and £125,140, you face a 60% marginal tax rate due to the personal allowance taper. A £10,000 pension contribution would save £6,000 in tax — the most efficient tax saving in the UK system.
How to Read Your Payslip
Understanding your payslip helps you spot errors and ensure you are paying the correct tax. Here is what each item means:
| Payslip Item | What It Means | Check This |
|---|---|---|
| Tax Code | Your personal allowance and any adjustments | Should match your circumstances. Use our Tax Code Checker. |
| Gross Pay (YTD) | Total pay so far this tax year | Check it matches your contract salary × months worked |
| Tax Paid (YTD) | Total Income Tax deducted | Use our calculator to verify the amount is correct |
| Employee NIC | Your National Insurance contributions | Should be 8% on £12,570-£50,270, 2% above |
| Pension (EE) | Your pension contribution | Should match your chosen percentage |
| Student Loan | Student loan deduction | Should match your plan type and threshold |
| Net Pay | What goes into your bank account | This should match our calculator result |
Red flag: If your tax code is BR, 0T, or has W1/M1 suffix for more than 2 months, contact HMRC. You are probably overpaying tax.
Tax-Saving Strategies That Actually Work
1. Salary Sacrifice Pension (Save 28-47%)
Instead of contributing to your pension from your net pay, ask your employer to reduce your salary by the pension amount and contribute it directly. This saves both Income Tax AND National Insurance.
Example: On a £45,000 salary, a £200/month salary sacrifice saves you £40 Income Tax + £16 NI = £56/month. Over a year, that is £672 extra in your pension for the same "cost" to your take-home pay.
2. Marriage Allowance (Save £252/year)
If you earn under £12,570 and your spouse is a basic rate taxpayer, you can transfer £1,260 of your unused personal allowance to them. This saves them £252 in tax every year. It takes 5 minutes to apply on GOV.UK. Check if you qualify.
3. Working From Home Allowance (£312/year)
If you work from home by arrangement with your employer, you can claim £6/week tax-free. Over a year that is £312. If your actual costs are higher, you can claim the exact amount with receipts.
4. Professional Subscriptions
If your job requires membership of a professional body (e.g., ACCA, CIPD, RICS, Nursing Midwifery Council), you can claim tax relief on the subscription fee. A £300 subscription saves a basic rate taxpayer £60, a higher rate taxpayer £120.
5. Check Your Tax Code Every April
HMRC issues new tax codes at the start of each tax year. A wrong code is the single biggest cause of overpaid tax. Our Tax Code Checker decodes any UK tax code in seconds.
Sources & Methodology
This calculator uses the following official sources for 2026/27:
All calculations are verified against official HMRC thresholds where available. For complex personal situations, consult a regulated financial adviser or accountant. This calculator provides estimates only — your actual tax position may differ based on individual circumstances.