Understanding your take-home pay can feel complicated, but the core process follows a clear set of steps. Once you know how income tax, National Insurance, pension and student loan deductions work, you can estimate your net salary with confidence · and verify the number our calculator gives you.
Your gross salary is your total pay before any deductions. This is the figure usually quoted in job adverts and employment contracts. It includes your basic pay plus any contractual allowances, but excludes expenses or one-off payments.
All deductions are calculated from your gross salary, so it is the starting point for every calculation below.
The personal allowance is the amount you can earn each year before paying income tax. For 2026/27, the standard personal allowance is £12,570. This means the first £12,570 of your salary is completely free of income tax.
If your income is above £100,000, your personal allowance is tapered · it reduces by £1 for every £2 you earn above £100,000, and disappears entirely at £125,140.
Once your personal allowance is used up, the remainder of your income is taxed in bands:
These bands are cumulative · you pay 20% only on the slice of income in the basic rate band, 40% only on the slice in the higher rate band, and so on. You do not pay 40% on your entire salary the moment you earn a penny above £50,270.
National Insurance is a separate deduction from income tax. Employees pay Class 1 NI on their earnings above the Primary Threshold. For 2026/27:
NI is calculated on the same gross salary as income tax, but uses slightly different thresholds. There is no NI on earnings below £12,570.
If you are enrolled in a workplace pension, your contributions are deducted from gross pay before or after tax, depending on whether your scheme is "relief at source" or "net pay". Most large employers use a salary sacrifice or net pay arrangement, which reduces your taxable income and therefore lowers your income tax and NI bills.
The minimum employee contribution under auto-enrolment is 5% of qualifying earnings (though many people contribute more). Our salary calculator lets you set your own contribution percentage.
Student loan repayments are collected through PAYE alongside tax and NI. The amount you repay depends on which plan you are on:
Enter your salary and our calculator applies all 2026/27 rates automatically · including tax, NI, pension and student loan.
Open Salary Calculator →| Gross Annual Salary | £35,000.00 |
| Personal Allowance | £12,570.00 |
| Taxable Income | £22,430.00 |
| Income Tax @ 20% | £4,486.00 |
| National Insurance @ 8% | £1,794.40 |
| Total Deductions | £6,280.40 |
| Annual Take-Home Pay | £28,719.60 |
| Monthly Take-Home Pay | £2,393.30 |
At £35,000, all your income falls within the basic rate band (£12,571 to £50,270), so you pay 20% on your taxable income of £22,430. National Insurance is 8% on earnings above £12,570, giving £1,794.40. Total deductions of £6,280.40 leave a take-home of £28,719.60 per year · or £2,393.30 per month.
Several factors can change the final figure beyond the basic calculation:
Our free salary calculator handles all of the above automatically. Simply enter your gross annual salary, select your tax code, pension contribution percentage and student loan plan, and click Calculate. Results update instantly and show monthly, annual, weekly, daily and hourly breakdowns.
You can also toggle between England/Wales, Scotland and Northern Ireland rates where different thresholds apply (Scottish taxpayers have different income tax bands from April 2024).
Use our free salary calculator to get your personalised take-home pay in seconds.
Open Calculator →Your tax code is shown on your payslip, P60 or P45. The most common code is 1257L, which gives you the standard £12,570 personal allowance. If you have multiple jobs or untaxed income, your code may differ. Contact HMRC or check your personal tax account at gov.uk if you are unsure.
Yes. If your pension is salary sacrifice, your contributions come out of gross pay before tax and NI are calculated. This means you save income tax and NI on your pension contributions, effectively making pension saving cheaper than it looks at face value.
Small differences can occur due to rounding in the payroll system, untaxed benefits, K tax codes, or PAYE adjustments from previous tax periods. The calculator gives an accurate estimate based on the figures you enter, but your employer's payroll software may apply period-specific adjustments.
For informational purposes only · Not financial advice · Tax rates shown are for 2026/27