How we calculate take-home pay
Tax year 2026/27 (6 April 2026 to 5 April 2027). Figures last reviewed October 2026. We update them every April and after each UK and Scottish Budget.
Order of the calculation
- Start from your annual gross salary (hourly, daily, weekly and monthly pay are converted using 52 weeks a year).
- Salary sacrifice pension contributions are taken off first. Tax, National Insurance and student loans are all worked out on the reduced pay.
- Net-pay pension contributions are taken off before income tax only (not before NI or student loans).
- The personal allowance (or the allowance in your tax code) is deducted, and the rest is taxed band by band.
- Employee Class 1 National Insurance and any student / postgraduate loan repayments are worked out on the year's pay.
- Relief-at-source pension contributions are paid from what is left: you pay 80% and the provider claims the 20% basic-rate relief from HMRC.
Income tax: England, Wales and Northern Ireland
Personal allowance £12,570, reduced by £1 for every £2 of adjusted net income above £100,000 (zero from £125,140). Wales currently uses the same rates as England.
| Band | Rate | Taxable income | Salary (standard allowance) |
|---|---|---|---|
| Personal Allowance | 0% | — | Up to £12,570 |
| Basic rate | 20% | £1 – £37,700 | £12,571 – £50,270 |
| Higher rate | 40% | £37,701 – £125,140 | £50,271 – £125,140 |
| Additional rate | 45% | Over £125,140 | Over £125,140 |
Income tax: Scotland
| Band | Rate | Taxable income | Salary (standard allowance) |
|---|---|---|---|
| Personal Allowance | 0% | — | Up to £12,570 |
| Starter rate | 19% | £1 – £3,967 | £12,571 – £16,537 |
| Basic rate | 20% | £3,968 – £16,956 | £16,538 – £29,526 |
| Intermediate rate | 21% | £16,957 – £31,092 | £29,527 – £43,662 |
| Higher rate | 42% | £31,093 – £62,430 | £43,663 – £75,000 |
| Advanced rate | 45% | £62,431 – £125,140 | £75,001 – £125,140 |
| Top rate | 48% | Over £125,140 | Over £125,140 |
National Insurance (employee, Class 1)
8% on earnings between £12,570 and £50,270 a year, 2% above £50,270. None if you are over State Pension age. We apply the annual thresholds; payroll applies weekly or monthly ones, which gives the same total for steady pay but can differ month to month if your pay varies.
Student and postgraduate loans
| Plan | Annual threshold | Rate above threshold |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 (Scotland) | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate loan | £21,000 | 6% |
Repayments are rounded down to whole pounds. A postgraduate loan is repaid on top of any undergraduate plan.
Pensions
Contributions can be a percentage of your whole salary or of qualifying earnings (£6,240 to £50,270), which is what many auto-enrolment schemes use. Employer contributions are not part of your take-home pay and are not shown.
Tax codes
If you enter a tax code we use it instead of the standard allowance: numbers ending in L, M, N or T give an allowance of the number × 10 (1257L = £12,570); K codes add the number × 10 to taxable pay; BR, D0 and D1 (SBR, SD0–SD3 in Scotland) tax all pay at one rate; 0T gives no allowance; NT means no tax. A leading S or C sets Scotland or Wales. Emergency suffixes (W1, M1, X) are ignored because we calculate a whole year.
Other 2026/27 rates used by our calculators
| Employer NI | 15% above £5,000; 0% up to £50,270 for under-21s and apprentices under 25 |
| Employment Allowance | £10,500 a year |
| Self-employed Class 4 NI | 6% on profits £12,570–£50,270, 2% above |
| Dividend tax | 10.75% / 35.75% / 39.35%, £500 allowance |
| Child Benefit | £27.05 a week (eldest), £17.90 (others); charge from £60,000, 1% per £200 |
| Minimum wage: 21 and over (National Living Wage) | £12.71 an hour |
| Minimum wage: 18 to 20 | £10.85 an hour |
| Minimum wage: 16 to 17 | £8.00 an hour |
| Minimum wage: Apprentice (under 19, or first year) | £8.00 an hour |
| Maternity, paternity, adoption, shared parental pay | £194.32 a week or 90% of earnings if lower; lower earnings limit £129 a week |
| Statutory Sick Pay | £123.25 a week or 80% of earnings if lower, from day one, up to 28 weeks |
| Redundancy pay | Weekly pay capped at £751, up to 20 years |
| Holiday | 5.6 weeks (max 28 days); irregular hours accrue 12.07% |
| New State Pension | £241.30 a week (full, 35 years; minimum 10) |
| Pension annual allowance | £60,000; tapered to £10,000 above £260,000 adjusted income; MPAA £10,000 |
| Tax-free pension cash | 25%, up to £268,275 (Lump Sum Allowance) |
| Auto-enrolment | Earnings trigger £10,000; minimum 8% of qualifying earnings, 3% from the employer |
What we simplify
- One employment, paid the same every period for the whole tax year. Payroll rounding can move a single payslip by a few pence.
- No benefits in kind, bonuses, overtime, other income, Marriage Allowance, Blind Person's Allowance or High Income Child Benefit Charge (enter your tax code to reflect allowances HMRC has set).
- The £100,000 allowance taper uses gross pay after salary sacrifice and net-pay pension. Relief-at-source pension and Gift Aid would lower your adjusted net income further; that is claimed through Self Assessment.
- Higher-rate relief on relief-at-source pension contributions is claimed through Self Assessment and is not added to take-home pay.
- K-code deductions are not capped at 50% of pay as payroll does.
Sources
- HMRC – Rates and thresholds for employers 2026 to 2027
- GOV.UK – Income Tax rates and Personal Allowances
- GOV.UK – Scottish Income Tax
- GOV.UK – National Insurance rates and categories
- GOV.UK – Repaying your student loan: what you pay
- GOV.UK – Tax on your private pension contributions (tax relief)
- GOV.UK – Workplace pensions: what you, your employer and the government pay
- GOV.UK – Tax codes
- GOV.UK – Benefit and pension rates 2026 to 2027
- GOV.UK – National Minimum Wage and National Living Wage rates
- GOV.UK – Statutory Maternity Pay
- GOV.UK – Statutory Sick Pay
- GOV.UK – Redundancy pay
- GOV.UK – Holiday entitlement
- GOV.UK – The new State Pension
- GOV.UK – State Pension age timetables
- GOV.UK – Tax on dividends
- GOV.UK – Self-employed National Insurance rates
- GOV.UK – High Income Child Benefit Charge
- GOV.UK – Tax on your private pension contributions (annual allowance)
- GOV.UK – Tax when you get a pension
These calculators are for guidance only and are not financial, tax or legal advice. Check your payslip and your personal tax account on GOV.UK, or speak to a qualified adviser about your situation.