UK Take-Home Pay Explained 2026/27

What Take-Home Pay Actually Is

Take-home pay — also called net pay — is your gross salary minus everything your employer deducts before the money reaches you. For most employees the two deductions that always apply are income tax and National Insurance (NI), deducted by your employer through PAYE (Pay As You Earn). The formula is simple: take-home pay = gross salary − income tax − National Insurance, before pension contributions and student loan repayments, covered below.

The two deductions are separate systems. Income tax is charged on income above the Personal Allowance, in bands; National Insurance on your gross earnings, with its own thresholds and rates. They are calculated independently — you cannot work out take-home pay by adding the two rates together — so each needs its own sum.

Income Tax in 2026/27: The Bands

The first £12,570 you earn in the tax year is your Personal Allowance and is tax-free. Everything above it is taxable income, charged in bands. In England, Wales and Northern Ireland there are three:

The bands are marginal: only the slice of income inside each band is taxed at that band's rate. Moving into the 40% band does not tax your whole salary at 40% — the first £37,700 of taxable income is still taxed at 20% — so a pay rise can never leave you worse off through income tax alone.

The Personal Allowance is not fixed for everyone. Above £100,000 it shrinks by £1 for every £2, reaching zero at £125,140 — above that, your whole salary is taxable. At £110,000 the allowance is £7,570. It has been frozen at £12,570 since April 2021, so as wages rise, more of each pay rise falls inside the taxable bands.

National Insurance: The Second Deduction

National Insurance is what employees pay towards state benefits and the State Pension. For 2026/27, employee Class 1 NI is 0% on earnings up to £12,570 a year, 8% between £12,570 and £50,270, and 2% above £50,270. Unlike income tax, NI is charged on gross earnings — the Personal Allowance does not come off first, even though the £12,570 starting point is the same figure — and there is no taper: the 2% rate applies to everything above £50,270.

Both systems share the £50,270 boundary, so the combined marginal rate is easy to read off: 20% tax + 8% NI = 28p per extra pound below £50,270; 40% + 2% = 42p above it (below £100,000). NI is the same UK-wide — Scotland sets its own income tax bands, but NI is reserved to Westminster.

Worked Example: £30,000 a Year

Take a gross salary of £30,000 in England, Wales or Northern Ireland, with the standard Personal Allowance and no pension or student loan. Taxable income is £30,000 − £12,570 = £17,430; income tax is 20% × £17,430 = £3,486.00; National Insurance is 8% × £17,430 = £1,394.40. Take-home pay is £25,119.60 a year — £2,093.30 a month and £483.07 a week — an effective tax rate of 16.3%.

The same £30,000 in Scotland differs slightly. Taxable income is again £17,430, but the Scottish bands split it three ways: 19% × £3,967 = £753.73 (starter), 20% × £12,989 = £2,597.80 (basic), 21% × £474 = £99.54 (intermediate) — £3,451.07 of income tax. National Insurance is the same UK-wide: £1,394.40. Take-home pay is £25,154.53 a year (£2,096.21 a month) — £34.93 a year more than in the rest of the UK, because the 19% starter rate undercuts the 20% basic rate. Every figure in this guide was produced by running the UK Salary Calculator itself.

Take-Home Pay at Eight Salaries

Take-home pay across the salary range (rest of the UK, standard Personal Allowance, no pension or student loan deductions):

Two patterns stand out. The effective tax rate rises with salary — from 10.4% at £20,000 to 31.4% at £100,000 — because more of each pound falls in the higher bands. And a pay rise is worth less the higher you go: £10,000 extra between £20,000 and £30,000 adds £7,200.00 to take-home pay, but the same £10,000 between £50,000 and £60,000 adds only £5,837.80 — the slice above £50,270 is taxed at 40%, not 20%.

The £100,000 Trap: Where the Marginal Rate Hits 62%

Between £100,000 and £125,140, the taper creates the highest marginal rate in the UK system. Each extra £1 is taxed at 40% — and it also removes 50p of your Personal Allowance, taxed at 40% as well, adding another 20p. That is 60p of income tax per extra pound, plus 2p of National Insurance: a 62% marginal rate. The calculator confirms it: raising a salary from £100,000 to £101,000 lifts take-home pay from £68,557.40 to £68,937.40 — just £380 kept from the extra £1,000.

The effect is large over a whole pay rise. At £110,000 the Personal Allowance has shrunk to £7,570, income tax is £33,432.00 and National Insurance is £4,210.60, leaving £72,357.40 — a £10,000 rise from £100,000 is worth only £3,800.00 in take-home terms. Pension contributions can change this, because they reduce the income counted for the taper — but the rules depend on your employer's scheme, so check with your employer or a financial adviser first.

Scotland: Six Bands Instead of Three

Scotland sets its own income tax rates on non-savings, non-dividend income — salary, self-employment profits, pensions and rent. There are six bands, starting lower than the rest of the UK (19%) and ending higher (48%). The Personal Allowance and its taper are the same, and National Insurance is UK-wide, so only the income tax bands change:

Whether Scotland costs more depends on your salary. Below roughly £33,500 the 19% starter rate leaves Scots slightly better off — £34.93 a year at £30,000. Above that, the 21% intermediate rate and the 42% higher rate (from £43,663, not £50,270) outweigh the saving: at £60,000 a Scottish taxpayer takes home £43,607.35, £1,750.05 a year less than in the rest of the UK. Scottish taxpayers have an S prefix on their tax code (S1257L), and savings and dividend income is still taxed at UK-wide rates.

What Else Comes Off Your Pay?

Income tax and NI are not the only deductions on most payslips. Pension contributions are the most common: under auto-enrolment, most employees pay into a workplace pension, usually before income tax is calculated, which lowers the tax you pay. The effect depends on your employer's scheme, so the calculator leaves pension contributions out — run your salary through it first, then subtract your pension contribution.

Student loan repayments are deducted through payroll too, at 9% of your income above your plan's threshold (6% for a Postgraduate Loan). The 2026/27 thresholds are:

On a £40,000 salary, a Plan 2 borrower repays 9% of (£40,000 − £29,385) = 9% of £10,615 = £955.35 a year, or £79.61 a month — on top of income tax and National Insurance. Work out your own repayment with the UK Student Loan Calculator. Other deductions — salary sacrifice, benefits in kind such as a company car, court-ordered deductions — are not included in this guide's figures, so adjust the numbers here for your own payslip.

Reading Your Payslip

Your payslip should show gross pay, income tax, National Insurance, pension and student loan deductions, and net pay. Check your tax code: the standard code is 1257L (S1257L in Scotland), giving the full £12,570 Personal Allowance. A different code — more than one job, or an HMRC adjustment — means different take-home pay, so query it with HMRC if it looks unfamiliar. And budget on the monthly figure: annual take-home pay divided by 12.

Sources: GOV.UK — Income Tax rates and bands; mygov.scot — Scottish income tax, current rates; Scottish Government — Scottish Rate Resolution 2026 to 2027; GOV.UK — Repaying your student loan. Every worked figure here comes from the UK Salary Calculator and the UK Student Loan Calculator on this site. Last reviewed: 13 November 2026.

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