UK Take-Home Pay Calculator

Basically, HMRC takes your annual salary, knocks off your personal allowance, then taxes what's left in chunks. So if you earn £55,000, you'd pay: nothing on the first £12,570, 20% on the next £37,700, and 40% on the remaining £4,730. That works out to about £11,432 in income tax. Then National Insurance and any student loan repayments come off on top of that. What's left is your take-home pay.

PAYE stands for Pay As You Earn. Your employer sorts out your tax before the money ever hits your bank account, so you don't have to do anything yourself. They use your tax code to work out the right deductions each month. If you only have one job and no side income, you'll never need to file a tax return.

For 2025/26, you pay 8% on everything you earn between £12,570 and £50,270, then 2% on anything above that. So on a £40,000 salary, your NI bill would be about £2,194. One thing a lot of people miss: NI contributions build up your state pension entitlement, so they're not just a tax — you need 35 qualifying years for the full state pension.

Here's how it works. In England, Wales and Northern Ireland: 0% up to £12,570, 20% from £12,571 to £50,270, 40% from £50,271 to £125,140, and 45% on everything above that. Scotland does its own thing with six bands ranging from 19% to 48%. Check your tax code on your payslip — if the number before the letter doesn't match 1257, ring HMRC because you might be on the wrong code.

They take 9% of everything above your plan's threshold. Plan 1 kicks in at £24,990, Plan 2 at £27,295, Plan 4 at £31,395, and Plan 5 at £25,000. On a postgraduate loan it's 6% above £21,000. If you're on Plan 2 earning £35,000, that's 9% of £7,705 — roughly £58 a month. And yes, if you're unlucky enough to have both an undergraduate and postgraduate loan, both get deducted at the same time.

This catches a lot of people out — in a good way. With salary sacrifice, you agree to a lower salary and your employer puts the difference straight into your pension (or another benefit). Because your gross pay drops before tax and NI are calculated, you save on both. Sacrificing £500/month at basic rate saves you roughly £140 compared to making a normal pension contribution from net pay.

Scotland has six bands instead of three: 19% starter rate up to £14,876, 20% basic to £26,561, 21% intermediate to £43,662, 42% higher to £75,000, 45% advanced to £125,140, and 48% top rate above that. The personal allowance is still £12,570. You'll know if you're on Scottish rates because your tax code starts with an S.

The short answer is it disappears. For every £2 you earn over £100,000, you lose £1 of your personal allowance. By the time you hit £125,140, it's gone completely. The painful bit? This creates a hidden 60% tax rate on income between £100k and £125k. A lot of people earning in that range make extra pension contributions to bring their adjusted income back below £100,000 — it's one of the most effective tax planning moves there is.

It depends on your scheme. With salary sacrifice, the money comes out before tax — you get full relief immediately. With a "net pay" scheme, same thing. But with a "relief at source" scheme, you pay from taxed income and your provider claims back 20% from HMRC. Higher-rate taxpayers need to claim the extra 20% through self-assessment. Check your payslip to see which type you're on.

It's the total percentage of your salary that actually goes to deductions — tax, NI, student loans, pension. It's always lower than your "marginal" rate because only a slice of your income gets taxed at each band. Someone on £50,000 might technically be a 40% taxpayer, but their effective rate is closer to 25%. It's a much better way to understand what you actually keep.