UK Salary & Tax Calculator

UK income tax is calculated on a progressive system with multiple brackets. For 2026/27 in England and Wales: you pay 0% on the first £12,570 (personal allowance), 20% on income between £12,571-£50,270, 40% on £50,271-£125,140, and 45% above £125,140. Scotland has additional tax bands with rates of 19%, 20%, 21%, 42%, 45%, and 48%. National Insurance adds 8% on earnings £12,571-£50,270 and 2% above. Your effective tax rate depends on your total income.

Take-home pay (net salary) is your gross salary minus all deductions: income tax, National Insurance, student loan repayments, and pension contributions. For example, on a £40,000 salary in England, you'd pay approximately £5,486 income tax, £2,874 National Insurance, giving you a net salary of around £31,640 annually (£2,637 monthly). Additional deductions like student loans or pension contributions reduce this further. Use our calculator for precise figures based on your circumstances.

The personal allowance is the amount you can earn tax-free each year - £12,570 for 2026/27. However, if you earn over £100,000, you lose £1 of personal allowance for every £2 earned above this threshold. This means your personal allowance disappears completely at £125,140. This creates an effective tax rate of 60% on income between £100,000-£125,140 (40% income tax + 20% from losing allowance, plus 2% NI).

For 2026/27, employees pay Class 1 National Insurance at 8% on earnings between £12,570 and £50,270 per year, then 2% on earnings above £50,270. If you're over state pension age (currently 66), you don't pay National Insurance at all. Employers pay 15% on earnings above £5,000 (increased from 13.8%/£9,100 from April 2025). Class 2 NI was abolished from April 2024 - self-employed individuals now only pay Class 4 NI (6% on profits £12,570-£50,270, then 2% above). Official rates: https://www.gov.uk/national-insurance-rates-letters

Student loan repayments are calculated as a percentage of income above a threshold. For 2026/27: Plan 1 loans repay 9% above £26,900, Plan 2 repays 9% above £29,385, Plan 4 repays 9% above £33,795, Plan 5 repays 9% above £25,000, and Postgraduate loans repay 6% above £21,000. If you have both undergraduate and postgraduate loans, you'll repay both simultaneously, potentially paying 15% on income above the lower threshold. Repayments stop when the loan is paid off or after 25-40 years depending on your plan. Official information: https://www.gov.uk/repaying-your-student-loan

Most financial advisors suggest contributing at least 12-15% of your gross salary to your pension (including employer contributions). Many employers match contributions up to a certain percentage - always contribute enough to get the full employer match as it's 'free money'. Pension contributions through salary sacrifice are tax-efficient: you save income tax and National Insurance. For a higher rate taxpayer contributing £5,000, the real cost is only £3,000 (saving 40% tax + 2% NI).

Scotland has a more progressive tax system with six bands instead of England's three. For 2026/27, Scotland charges: 19% (starter rate) on £12,571–£16,537, 20% (basic) on £16,538–£29,526, 21% (intermediate) on £29,527–£43,662, 42% (higher) on £43,663–£75,000, 45% (advanced) on £75,001–£125,140, and 48% (top) above £125,140. This means Scottish taxpayers typically pay slightly more tax than those in England at middle income levels, but the differences vary significantly depending on income.

If you're married or in a civil partnership, and one partner earns less than £12,570 while the other is a basic rate taxpayer, you can transfer £1,260 of unused personal allowance. This saves the higher earner £252 per year (20% of £1,260). You can't use this if either partner pays higher rate tax (40%) or if you're claiming Married Couple's Allowance (only available if one partner was born before April 6, 1935).

PAYE (Pay As You Earn) is the system employers use to deduct income tax and National Insurance from your wages before paying you. Your employer uses your tax code (usually 1257L for 2026/27) to calculate deductions. PAYE aims to collect the right amount of tax throughout the year, so you don't owe anything at year-end. However, if you have multiple jobs, benefits in kind, or untaxed income, HMRC may adjust your tax code or send a bill. You can check your PAYE details through your online HMRC account.

Legal tax-saving strategies include: 1) Maximize pension contributions (save income tax + NI), 2) Use your £20,000 ISA allowance for tax-free investment growth, 3) If married, transfer assets to the lower-earning partner to use both personal allowances, 4) Claim all eligible expenses if self-employed, 5) Use salary sacrifice for benefits like cycle-to-work or childcare vouchers, 6) Time income/bonuses to avoid the £100k personal allowance taper, 7) Utilize capital gains tax allowance (£3,000 for 2026/27). Always consult a tax advisor for your specific circumstances.

You rarely keep 100% of a pay rise - income tax and National Insurance are deducted on the additional earnings at your marginal rate. If you're a basic rate taxpayer (earning £12,570–£50,270), you'll keep roughly 68p of every extra £1 (20% income tax + 8% NI + 4% employer NI is invisible to you, but your effective combined deduction on the rise is 28% employee-side). As a higher rate taxpayer (above £50,270), you keep around 58p of every extra £1 (40% tax + 2% NI = 42% deducted). Use the Pay Rise toggle above to enter your exact rise and see the precise monthly and annual difference to your take-home pay.

Your new take-home pay after a pay rise depends on your current salary, the size of the rise, and which tax band the additional income falls into. For example, going from £30,000 to £33,000 (a £3,000 or 10% rise) would increase your monthly take-home by roughly £178/month, because 28% is deducted in income tax and National Insurance. Going from £48,000 to £52,000 crosses the higher-rate threshold at £50,270, so the portion above that is taxed at 42% (40% income tax + 2% NI), meaning you'd keep less of the rise than you might expect. Enable the Pay Rise feature on this calculator to see your exact figures instantly.

In the UK, tax brackets only apply to the income within each band - getting a rise does not mean your entire salary is suddenly taxed at the higher rate. Only the portion above the threshold is taxed at the new rate. The key thresholds for 2026-27 are: £12,570 (personal allowance ends, 20% basic rate begins), £50,270 (higher rate 40% begins), and £100,000 (personal allowance taper starts, creating an effective 60% rate on income between £100k–£125,140). If your rise takes you over £50,270 or £100,000, the Pay Rise calculator above will show a warning and calculate exactly how much you keep from each portion of the rise.

Yes - you always take home more money from a pay rise, even after tax. While your deductions increase, your net pay rises too. On a basic rate salary, a £3,000 rise nets you roughly £2,136/year (£178/month) extra. On a higher rate salary, a £3,000 rise nets around £1,740/year (£145/month). The only edge case is if your salary crosses £100,000, where the personal allowance taper creates an effective 60% rate - in that scenario, salary sacrificing into a pension can be more efficient than taking all of the rise as cash pay.