How we calculate your take-home pay
Every calculator on this site uses the same engine and the same published 2026/27 rates. This page sets out the order of calculation, the exact figures we use, where they come from, and the cases the model deliberately does not cover.
The order of calculation
Take-home pay is not simply gross minus tax. We apply deductions in the order payroll normally does:
- Establish pensionable pay. Base salary plus bonus and other cash earnings, converted to an annual figure from your chosen pay frequency.
- Apply pre-tax pension and deductions. Net pay and salary sacrifice reduce taxable pay; relief-at-source does not reduce taxable pay but reduces cash received.
- Calculate Personal Allowance. £12,570, reduced by £1 for every £2 of adjusted net income above £100,000, reaching zero at £125,140.
- Apply Income Tax bands to taxable pay, using the nation selected (England, Wales, Northern Ireland or Scotland).
- Calculate employee National Insurance on gross earnings, after any salary sacrifice reduction.
- Deduct student loan at 9% (or 6% for postgraduate) of earnings above the plan threshold.
- Add or claw back benefits such as the High Income Child Benefit Charge, then subtract everything from gross cash pay.
Income Tax 2026/27
England, Wales and Northern Ireland share the same non-savings Income Tax bands. Scotland has its own band structure, but the Personal Allowance is the same.
| Band | Taxable 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% |
Scotland 2026/27:
| Band | Taxable income | Rate |
|---|---|---|
| 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% |
A tax code changes the allowance we apply. 1257L means the standard £12,570 allowance. BR and D0 tax all pay at 20% and 40% with no allowance, which is common for a second job. Codes beginning with S, C or W select Scottish, Welsh or Northern Ireland rates.
National Insurance 2026/27
Employee Class 1 NI is calculated per pay period in real payroll, but the annual model gives the same result for a steady salary:
| Category | Earnings band | Employee rate |
|---|---|---|
| Class 1, category A | £12,571 – £50,270 | 8% |
| Class 1, category A | Above £50,270 | 2% |
| Employer NI | Above £5,000 | 15% |
Salary sacrifice pension reduces the earnings used for employee and employer NI. Net pay and relief-at-source pensions do not. The Employment Allowance (£10,500) can reduce an eligible employer's bill, but it does not change your take-home pay.
Pension contributions
The calculator supports the three arrangements employees most often see:
| Arrangement | Reduces taxable pay? | Reduces NI? | Take-home effect |
|---|---|---|---|
| Net pay | Yes | No | Contribution comes out before Income Tax |
| Salary sacrifice | Yes | Yes | Contribution comes out before tax and NI |
| Relief at source | No | No | You pay from net pay; the provider claims basic-rate relief |
For NHS and teachers' pensions we apply the published tiered employee rates automatically. NHS tiers in 2026/27 run from 5.2% to 12.5%; Teachers' Pension tiers run from 7.4% to 12.0%. Both are net pay arrangements, so they reduce Income Tax but not NI.
Student loans
Repayments are a fixed percentage of earnings above the threshold, not a percentage of the debt. They are not reduced by pension contributions under Plans 1, 2, 4 or 5.
| Plan | 2026/27 threshold | Repayment rate |
|---|---|---|
| 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% |
If you have two jobs, each payroll deducts separately. Our two-jobs calculator combines income first so you can see the total repayment that would be due through self assessment.
Benefits, allowances and thresholds
These thresholds create some of the highest marginal rates in the tax system, so they are modelled explicitly:
- Personal Allowance taper: income above £100,000 loses £1 of allowance per £2, an effective 60% band until £125,140.
- High Income Child Benefit Charge: 1% of Child Benefit is repaid for every £200 of adjusted net income above £60,000, reaching 100% at £80,000.
- Child Benefit rates: £27.05 a week for the eldest or only child and £17.90 for each additional child in 2026/27.
- Marriage Allowance: transfers £1,260 of allowance, worth up to £252 a year at the basic rate.
Pension contributions under net pay or salary sacrifice reduce adjusted net income, which can bring you back under the £60,000 and £100,000 thresholds.
Capital gains, dividends and business profits
Specialist calculators use the same 2026/27 constants:
| Tax | 2026/27 figures |
|---|---|
| Capital Gains Tax | £3,000 annual exempt amount; 18% basic-rate band, 24% above |
| Dividend tax | £500 allowance; 10.75% basic, 35.75% higher, 39.35% additional |
| Corporation Tax | 19% up to £50,000 profit, 25% above £250,000, with marginal relief between |
| Class 4 NI (self-employed) | 6% between £12,570 and £50,270; 2% above |
Stamp Duty Land Tax, VAT and business rates depend on property price, location and reliefs, so they are calculated in their own tools rather than the salary engine.
What the model does not include
No calculator can know your full payroll. We deliberately leave out items that are personal, irregular or require information the tool does not collect:
- Benefits in kind already taxed through your code, company cars, medical insurance and other P11D items.
- Payroll timing, week-1/month-1 codes, mid-year job changes and cumulative refunds.
- Pension annual allowance charges, lifetime allowance tests and employer contribution limits.
- Salary sacrifice effects on other entitlements, such as some benefits or mortgage assessments.
- Scottish Income Tax on savings and dividends: Scotland uses UK-wide rates for those income types.
- Student loan plan eligibility, postgraduate loan interactions and refunds after overpayment.
- Local pay supplements, unsocial hours, overtime rules and part-time pension tier adjustments unless you enter them.
Sources and review date
Rates were last reviewed on 2 November 2026. The 2026/27 tax year runs from 6 April 2026 to 5 April 2027. Official sources:
- GOV.UK: Income Tax rates and Personal Allowances
- GOV.UK: Scottish Income Tax rates
- GOV.UK: National Insurance rates and categories
- GOV.UK: Student loan repayment thresholds
- GOV.UK: Child Benefit rates
- NHSBSA: NHS Pension contribution tiers
- Teachers' Pensions: contribution rates
- GOV.UK: Capital Gains Tax rates
- GOV.UK: Tax on dividends
- GOV.UK: Corporation Tax rates
Frequently asked questions
Why can my actual payslip differ from the calculator?
Payroll applies your tax code cumulatively, spreads allowances across pay periods and may include benefits, overtime or deductions the calculator does not know about. The calculator gives an annual steady-state estimate, not a month-by-month payroll forecast.
Does the calculator use 2026/27 rates?
Yes. Income Tax, National Insurance, student loan thresholds, Child Benefit, pension tiers and CGT rates reflect the 2026/27 tax year (6 April 2026 to 5 April 2027). Rates are reviewed when HMRC or the relevant scheme publishes changes.
Is the pension deducted before or after tax?
Net pay and salary sacrifice contributions reduce taxable pay before Income Tax, and salary sacrifice also reduces the earnings base for National Insurance. Relief-at-source contributions are paid from net pay and the provider claims basic-rate relief, so the calculator models only their take-home cost.
Check your own numbers
The main take-home calculator applies every rule on this page, including region, pension basis, student loan plan and benefit charge.
Open the Take-Home Pay Calculator