How UK take-home pay is worked out
The 2026/27 tax year runs from 6 April 2026 to 5 April 2027. Three things come out of most payslips: income tax, National Insurance and, if you have one, a student loan repayment. A workplace pension usually comes out too. The calculator works through them in the same order your payroll does:
Income tax bands for 2026/27
Everyone starts with a £12,570 personal allowance. It shrinks by £1 for every £2 of income over £100,000 and is gone at £125,140.
| England, Wales and Northern Ireland | 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% |
| Scotland | Income | Rate |
|---|---|---|
| Personal allowance | Up to £12,570 | 0% |
| Starter rate | £12,571 to £16,537 | 19% |
| Basic rate | £16,538 to £29,526 | 20% |
| Intermediate rate | £29,527 to £43,662 | 21% |
| Higher rate | £43,663 to £75,000 | 42% |
| Advanced rate | £75,001 to £125,140 | 45% |
| Top rate | Over £125,140 | 48% |
Employees also pay Class 1 National Insurance: 8% on earnings between £12,570 and £50,270 a year, and 2% above that. Student loans take 9% of income over your plan’s threshold: £26,900 for Plan 1, £29,385 for Plan 2, £33,795 for Plan 4 and £25,000 for Plan 5. A Postgraduate Loan takes 6% over £21,000.
Source: GOV.UK rates and thresholds for employers 2026 to 2027, checked on 21 October 2026.
Worked example: £35,000 in England with a 5% pension
- Pension (net pay arrangement): 5% of £35,000 = £1,750, taken before tax.
- Taxable income: £35,000 − £1,750 − £12,570 = £20,680. Income tax at 20% = £4,136.
- National Insurance is charged on the full £35,000: 8% × (£35,000 − £12,570) = £1,794.40.
- Take-home: £35,000 − £1,750 − £4,136 − £1,794.40 = £27,319.60 a year, or about £2,276.63 a month.
With a Plan 2 student loan, add 9% × (£35,000 − £29,385) = £505.35 a year, about £42 a month. The same salary in Scotland pays £4,133.57 income tax, £2.43 less: at this level the 19% starter band slightly outweighs the 21% intermediate band. Once taxable pay passes about £33,500, Scottish taxpayers start paying more.
Three ways to pay into a pension
- Net pay arrangement: the contribution leaves your pay before income tax, so you get relief at your top rate automatically. National Insurance is still charged on the full salary.
- Relief at source: you pay from take-home pay and the pension provider adds 20%. If you pay 40% or more tax, you claim the extra relief through Self Assessment or your tax code. The calculator shows that extra amount separately.
- Salary sacrifice: you give up part of your salary and your employer pays it into the pension. You save income tax and National Insurance, and student loan repayments fall too, because they are based on the lower salary.
The £100,000 trap
Between £100,000 and £125,140, every extra £2 you earn removes £1 of personal allowance. At 40% tax that works out to an effective 60% rate (67.5% for Scottish taxpayers at 45%). Pension contributions bring your adjusted net income down, so they can restore the allowance. At £110,000, a 10% salary sacrifice brings income back to £99,000 and the full £12,570 allowance returns.
Tips and limits
- Check your tax code. The calculator assumes the standard 1257L code. Benefits in kind, a second job or unpaid tax from earlier years change your code and your pay.
- Payroll works per pay period. National Insurance and student loans are worked out on each payslip, so a bonus month can look different from a normal month even if the yearly total matches.
- Two student loan plans? You pay 9% once, on income over the lowest of your thresholds. Pick that plan in the calculator.
- Planning a move or a mortgage? Use your monthly take-home figure in the mortgage calculator or the loan calculator. For a pay rise, the percentage calculator shows the change in percent. Our UK tax bands 2026/27 guide explains each band in more detail.