UK Take-Home Pay Calculator: Understand Your Salary and Payslip (2025/26)
Ever looked at your payslip and wondered where all your money goes before it even hits your bank account? You’re not alone. The journey from your "gross" salary to your "net" take-home pay can be complex, with a host of deductions like Income Tax, National Insurance, pension contributions, and student loans all playing a part.
At Plouta, we believe that understanding your payslip is a fundamental step towards financial empowerment. To make this easier, we've designed a simple and powerful Take-Home Pay Calculator to give you an instant breakdown of your earnings.
Use our calculator to see your personalised results, and then use this guide to understand exactly what each figure means. We’ll demystify every element, from your tax code to salary sacrifice, helping you take full control of your financial picture.
UK Take-Home Salary Calculator
Annual Take-Home
£0.00Monthly Take-Home
£0.00Weekly Take-Home
£0.00Your Pay Breakdown
This calculator provides an illustration for employed individuals and does not constitute financial advice. It assumes you are under state pension age. 2025/26 rates are based on currently announced government plans and may be subject to change.
What You'll Learn in This Guide:
Gross vs. Net Pay: The fundamental difference.
Decoding Your Deductions: A detailed look at Income Tax, National Insurance, Pensions, and more.
Allowances & Tax Codes: Understanding how your tax-free pay is calculated.
Optional Deductions: How things like salary sacrifice and Gift Aid can affect your pay.
Variable Pay: The impact of a bonus or overtime on your take-home salary.
The Building Blocks of Your Payslip
Understanding these core concepts is the key to reading your payslip with confidence.
Personal Allowance
Most people in the UK have a Personal Allowance, which is the amount of income you can earn each year before you start paying Income Tax.
For the 2025/26 tax year, the standard Personal Allowance is £12,570.
This allowance is "tapered" (reduced) by £1 for every £2 you earn over £100,000, meaning you lose it completely if you earn over £125,140.
Tax Code
Your tax code is what tells your employer how much tax-free allowance to give you. The most common code is 1257L.
The 1257 corresponds to the £12,570 Personal Allowance.
The L signifies you're entitled to the standard allowance. If your code is different, it means HMRC has adjusted your allowance, perhaps because you have a second job or receive taxable benefits from your employer.
Income Tax
This is the government's primary tax on your earnings above your Personal Allowance. The UK has a progressive system with different tax bands. The rates below apply to taxpayers in England, Wales, and Northern Ireland (Scotland has different bands and rates).
| Tax Band | Taxable Income (2025/26) | Tax Rate |
|---|---|---|
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
National Insurance Contributions (NICs)
This is another mandatory deduction that funds state benefits like the State Pension, Jobseeker's Allowance, and the NHS.
NIC Letter / Category: The letter on your payslip (e.g., A, B, C, H, M, Z) indicates your circumstances. Most employees are on Category A.
Employee NICs (Class 1): For 2025/26, you typically pay:
8% on earnings between £12,570 and £50,270 per year.
2% on any earnings over £50,270 per year.
| Tax Code | Description |
|---|---|
| ****L | Standard tax-free Personal Allowance |
| ****M | Marriage Allowance: 10% transfer of partner's Personal Allowance received |
| ****N | Marriage Allowance: 10% transfer of your Personal Allowance given |
| ****T | Tax code includes other calculations; needs review by HMRC |
| K**** | You have untaxed income that exceeds your Personal Allowance |
| 0T | Your Personal Allowance has been used up or you lack a P45 |
| BR | All income from this source is taxed at the Basic Rate |
| D0 | All income from this source is taxed at the Higher Rate |
| D1 | All income from this source is taxed at the Additional Rate |
| NT | No tax to be paid on this income |
| Tax Band | Taxable Income | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
| Tax Band | Taxable Income | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter Rate | £12,571 – £15,397 | 19% |
| Basic Rate | £15,398 – £27,491 | 20% |
| Intermediate Rate | £27,492 – £43,662 | 21% |
| Higher Rate | £43,663 – £75,000 | 42% |
| Advanced Rate | £75,001 – £125,140 | 45% |
| Top Rate | Over £125,140 | 48% |
| Your Income Tax Band | Tax-Free Savings Allowance |
|---|---|
| Basic Rate | £1,000 |
| Higher Rate | £500 |
| Additional Rate | £0 |
| Plan Type | Repayment Threshold (Annual) | Repayment Rate |
|---|---|---|
| Plan 1 | £26,065 | 9% |
| Plan 2 | £28,470 | 9% |
| Plan 4 | £32,745 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate Loan (PG) | £21,000 | 6% |
| Your Income Tax Band | Dividend Tax Rate |
|---|---|
| Basic Rate | 8.75% |
| Higher Rate | 33.75% |
| Additional Rate | 39.35% |
| Category Letter | Description |
|---|---|
| A | All employees not in another category (the most common) |
| B | Married women and widows with reduced National Insurance |
| C | Employees over the State Pension age |
| H | Apprentices under 25 |
| M | Employees under 21 |
| F | Freeport employees |
Common Deductions & Additions Explained
Beyond the main taxes, your payslip will show other important figures.
Pension Contributions
If you're in a workplace pension scheme (auto-enrolment), this is one of the most valuable deductions.
How it works: You contribute a percentage of your salary (e.g., 5%), your employer contributes (e.g., 3%), and you get government tax relief.
The Benefit: Pension contributions are taken from your gross pay before tax is calculated. This means you get tax relief at your highest rate, reducing your overall tax bill and making it a highly efficient way to save.
Student Loan Repayments
If you have a student loan, repayments are automatically deducted by your employer once your income is over a certain threshold. The threshold and repayment rate depend on which "Plan" you are on.
Example (Plan 2): You repay 9% of your income above the threshold (currently £27,295 per year).
Salary Sacrifice
This is a formal arrangement with your employer where you agree to give up part of your salary in exchange for a non-cash benefit, such as increased pension contributions, a cycle-to-work scheme, or childcare vouchers.
The Benefit: Because you are technically earning a lower salary, both you and your employer pay less National Insurance. For higher-rate taxpayers, this can be a very effective way to reduce your tax bill.
Taxable Benefits (Benefits in Kind)
If your employer provides you with non-cash benefits like a company car, private medical insurance, or a gym membership, these have a "cash equivalent" value that is taxable. HMRC will adjust your tax code to collect the tax due on these benefits.
Variable Pay: How Bonuses & Overtime Affect Your Pay
Receiving a bonus or working overtime can be a great boost, but it's important to understand how it's taxed.
Bonus & Overtime: These payments are simply added to your regular earnings for that pay period (e.g., that month). The total amount is then taxed.
The Impact: A large bonus can push you into a higher tax bracket for that month, meaning you might pay 40% or 45% tax on that portion of your earnings. You will also pay National Insurance on it. Our calculator can help you see the net effect of a bonus on your take-home pay.
Other Factors That Can Affect Your Take-Home Pay
Other Income: If you have other taxable income (e.g., from property or savings interest that exceeds your allowance), HMRC may adjust your tax code to collect this tax through your salary.
Gift Aid: If you make charitable donations via Gift Aid and are a higher-rate taxpayer, you can claim back the extra tax relief (the difference between the basic rate and your higher rate) via a Self Assessment tax return. This doesn't affect your payslip directly but does increase your overall net income after tax.
Empower Yourself by Understanding Your Pay
Your payslip tells the story of your earnings. By taking the time to understand each element from your Personal Allowance and tax code to pension contributions and student loans, you move from being a passive recipient of a net figure to an empowered manager of your own finances.
Use the Plouta Take-Home Pay Calculator as your starting point to get a clear picture, and use this guide to understand the "why" behind the numbers. This knowledge is fundamental to effective budgeting, saving, and building your path to financial freedom.
Disclaimer: This guide provides general information about UK take-home pay based on rules and allowances known as of June 2025. It is for informational and educational purposes only and does not constitute financial or tax advice. Tax laws, rates, and thresholds are complex and subject to change. Your personal circumstances will affect your tax liability. Always refer to the official GOV.UK website and consider seeking professional financial advice.
