Take-Home Pay Calculator 2026/27 — Free UK Salary Calculator

How UK salary tax is calculated in 2026/27

Your gross salary is reduced by three main deductions before it reaches your bank account: Income Tax, employee National Insurance contributions (NICs), and any pension contributions. Understanding how each one works helps you plan your finances and verify that your payslip is correct.

Income Tax is calculated on your taxable income — your gross salary minus the Personal Allowance (£12,570 for 2026/27). The basic rate of 20% applies to the first £37,700 of taxable income (up to £50,270 total). The higher rate of 40% applies between £50,271 and £125,140, and the additional rate of 45% applies above £125,140. Crucially, these are marginal rates — only the portion within each band is taxed at that rate, not your entire salary.

National Insurance is charged at 8% on earnings between £12,570 and £50,270 (the primary threshold to the upper earnings limit), and 2% above that. Unlike Income Tax, there is no personal allowance for NI — it kicks in from the first pound above the threshold. Employers also pay Class 1 secondary NI at 15% on earnings above the secondary threshold (£5,000), which is an additional cost to your employer beyond your salary.

Scottish income tax rates

If you live in Scotland, you pay Scottish income tax rates which differ significantly from the rest of the UK. Scotland has six tax bands compared to three in England, Wales, and Northern Ireland: Starter (19%), Basic (20%), Intermediate (21%), Higher (42%), Advanced (45%), and Top (48%). The thresholds also differ. This means a Scottish resident on the same gross salary as someone in England can have materially different take-home pay — sometimes higher, sometimes lower, depending on the salary level. This calculator handles both regions automatically when you select your location.

Student loan repayments

If you have a student loan, repayments are deducted directly from your salary. The repayment threshold and rate depend on your loan plan. For 2026/27, Plan 1 (pre-2012 loans) is repaid at 9% on earnings above £22,015. Plan 2 (2012–2023 loans) is 9% above £27,295. Plan 4 (Scottish post-1998 loans) is 9% above £25,375. Plan 5 (new English loans from 2023 onwards) is 9% above £25,000. The repayment is calculated on your entire income above the threshold — not just the portion within the band. This calculator does not currently deduct student loan repayments, so you must subtract them manually if applicable.

The personal allowance taper

If your adjusted net income exceeds £100,000, your Personal Allowance is reduced by £1 for every £2 of income above that threshold. This means it reaches zero at £125,140. The practical effect is a marginal tax rate of 60% on income between £100,000 and £125,140 — you lose £1 of allowance (which was saving you 40p in tax) for every £2 earned, on top of the 40% higher rate. Many higher earners use pension contributions to bring their adjusted net income below £100,000 and recover the full allowance.

Pension contributions and salary sacrifice

Workplace pension contributions are typically deducted before tax (relief at source) or through salary sacrifice. Under a salary sacrifice arrangement, you agree to reduce your gross salary in exchange for an equivalent employer pension contribution — this reduces your Income Tax, National Insurance, and student loan repayments because your gross salary is lower. The saving is significant: a £5,000 salary sacrifice contribution saves you up to £2,000 in combined tax and NI if you are a higher-rate taxpayer. Many employers share some of their NI saving (15%) back into your pension as an additional contribution.

This calculator shows take-home pay before pension contributions. If you contribute through a net-pay or relief-at-source arrangement, subtract your contribution percentage from the result. If you use salary sacrifice, enter the reduced gross salary to see the correct take-home figure.

Tax codes and what yours means

Your tax code tells your employer how much tax-free pay you are entitled to in each pay period. The most common code for 2026/27 is 1257L, which gives you the standard Personal Allowance of £12,570 spread evenly across the year. If your code is different, it may reflect: a higher allowance because you claim marriage allowance (couples can transfer 10% of the unused allowance to a spouse, worth up to £252/year), a reduced allowance because you owe tax from a previous year or have a company benefit (such as a company car), or emergency tax (usually 1257L W1 or M1) if HMRC does not have your full employment details.

You can check your tax code on your HMRC app, your personal tax account at gov.uk, or your payslip. An incorrect tax code is the most common reason for overpaying or underpaying tax — if you think yours is wrong, contact HMRC.

Net to gross salary — reverse calculation

If you know your target take-home pay and want to find the gross salary needed, the calculation is not straightforward because Income Tax and NI apply at marginal rates across different bands. The reverse calculation requires working backwards from your desired net income, adding the tax and NI that would be due at each marginal rate until the gross figure is found. This calculator handles forward calculation from gross to net. For a reverse estimate, start with a gross figure and adjust until the net matches your target — the marginal rate breakdown will show you exactly how much of each additional pound reaches your bank account.

Using this calculator for salary negotiation

When negotiating a salary, the number that matters is take-home pay — not the headline figure. A £5,000 pay rise from £45,000 to £50,000 adds approximately £3,250 to your annual take-home (after 20% tax and 8% NI). The same £5,000 rise from £50,000 to £55,000 adds only approximately £2,600 — because the portion above £50,270 is taxed at 40%. Understanding where you sit relative to the tax band boundaries helps you negotiate more effectively and evaluate whether a role change is financially worthwhile after deductions.

For contractors comparing day rates to permanent salaries, the Contractor Day Rate Calculator converts between the two, and the IR35 Calculator shows the take-home difference between inside and outside IR35 at any given rate. The Stamp Duty Calculator helps you budget for property purchase costs if you are saving your salary towards a home.