How UK take-home pay is calculated
Income Tax. Everyone gets a tax-free Personal Allowance of £12,570, reduced by £1 for every £2 of adjusted net income above £100,000 — so it disappears completely at £125,140. Income above the allowance is taxed in bands. If you live in Scotland, Scottish rates and bands apply to your earnings instead of the rest-of-UK ones.
National Insurance. Employees (category A) pay Class 1 NI of 8% on earnings between £12,570 and £50,270 a year and 2% above that. NI is worked out on each pay period in real payroll; this calculator uses the annual equivalent, which gives the same result for a steady salary.
Pension. With a net pay or relief at source scheme, contributions get income tax relief but you still pay NI on them. With salary sacrifice, your salary is reduced before tax and NI, so you save both. Student loans are repaid at 9% of earnings above your plan's threshold (Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000) plus 6% above £21,000 for a Postgraduate Loan.
Income Tax bands 2026/27 — England, Wales and Northern Ireland
| Band | Income | Rate |
|---|---|---|
| Personal Allowance | £0 – £12,570 | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Scottish Income Tax bands 2026/27
| Band | Income | Rate |
|---|---|---|
| Personal Allowance | £0 – £12,570 | 0% |
| Starter rate | £12,571 – £16,537 | 19% |
| Basic rate | £16,538 – £29,526 | 20% |
| Intermediate rate | £29,527 – £43,662 | 21% |
| Higher rate | £43,663 – £75,000 | 42% |
| Advanced rate | £75,001 – £125,140 | 45% |
| Top rate | Over £125,140 | 48% |
Bands shown assume the standard Personal Allowance. Scottish rates only apply to earnings (non-savings, non-dividend income) of Scottish taxpayers.
Worked examples
£35,000 salary in England
Taxable income is £35,000 − £12,570 = £22,430, taxed at 20% = £4,486.00. National Insurance is 8% × £22,430 = £1,794.40. Take-home pay: £28,719.60 a year, or £2,393.30 a month.
The same salary in Scotland
Scottish Income Tax on the same £22,430 is £4,501.07 (starter, basic and intermediate rates), so take-home pay is £28,704.53 — £15.07 less than in England.
£60,000 with 5% salary sacrifice and a Plan 2 loan
Salary sacrifice reduces pay to £57,000, which keeps more income below the 40% band and lowers NI. Income Tax is £10,232.00, NI £3,150.60 and the Plan 2 repayment £2,485.00. Take-home pay: £41,132.40 plus £3,000 going into your pension.
The 60% trap at £110,000
Between £100,000 and £125,140 the Personal Allowance is withdrawn, so each extra pound is effectively taxed at 60% (plus 2% NI). At £110,000 the allowance falls to £7,570 and take-home pay is £72,357.40. Pension contributions or salary sacrifice are the usual way to reduce adjusted net income in this range.
What is not included
Tax codes other than 1257L, benefits in kind, the High Income Child Benefit Charge, the Marriage Allowance, Welsh-specific changes (Welsh rates currently match England) and taxes on savings, dividends or self-employment profits.
Frequently asked questions
What is the Personal Allowance for 2026/27?
£12,570. It is reduced by £1 for every £2 of adjusted net income over £100,000, reaching zero at £125,140.
How much National Insurance do employees pay in 2026/27?
8% on earnings between £242 and £967 a week (£12,570–£50,270 a year) and 2% above that.
Are Scottish tax rates different?
Yes. Scottish taxpayers pay six rates from 19% to 48% on earnings: starter, basic, intermediate, higher, advanced and top. National Insurance is the same across the UK.
What are the student loan thresholds for 2026/27?
Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000 (9% above the threshold) and Postgraduate Loan £21,000 (6%).
Why does my payslip differ slightly?
Payroll works period by period, rounds amounts and may use a different tax code or include benefits, overtime or bonuses. The annual totals are usually very close.