Calculation methodology

The order the calculator works in

Take-home pay is not one subtraction from a salary. The calculator starts with your gross pay for the year — salary plus any bonus and other income you enter — and works through the deductions in a fixed order, because each step decides what the next step is allowed to see.

• Pension first. Depending on the method, the contribution reduces the pay Income Tax sees, the pay National Insurance sees, both, or neither.
• Then the Personal Allowance. Your tax code sets it, and the taper cuts it back if your income after any taxable-pay pension reduction is high enough.
• Then Income Tax, applied band by band to what is left after the allowance rather than to your gross salary.
• Then National Insurance, worked out again from the top on its own earnings base and its own thresholds.
• Then student loan and postgraduate loan repayments, taken from the same earnings base National Insurance uses.
• Take-home pay is gross pay less the pension money that actually leaves your pay, Income Tax, National Insurance and any loan repayments.

Income Tax and National Insurance are not worked out on the same figure

This is the single thing most people get wrong, and it explains most arguments with a payslip. Income Tax is charged on taxable income: gross pay, less any pension contribution that reduces taxable pay, less whatever Personal Allowance your tax code leaves you with. National Insurance ignores all of that. It goes back to gross pay, subtracts only a contribution made by salary sacrifice, and applies its own thresholds, with no allowance in it and no tax code involved. That is why a tax code change moves your Income Tax and leaves National Insurance exactly where it was, and why two people paying identical Income Tax can pay different National Insurance purely because of how their pensions are set up.

How Income Tax is worked out

Your tax code is an input, not a result. The digits in a standard code are the tax-free allowance it carries with a nought knocked off the end, and the letter records why. The calculator reads the code, works out what allowance it grants, takes that off, and applies the bands to the remainder.

• Codes ending L, M, N or T are ordinary allowance codes. BR, D0 and D1 — and D0 to D3 on a Scottish code — carry no allowance and tax everything at a single rate. A 0T code gives no allowance but still runs the normal bands, and NT takes no Income Tax at all.
• A K code works the other way round. Instead of sheltering part of your pay it adds an amount to your taxable income, which is how HMRC collects tax on something that will not fit inside an allowance.
• The bands fill from the bottom up, each taking the slice of taxable income that falls inside it. Being a higher-rate taxpayer does not mean everything is taxed at the higher rate; it means the top slice is.
• An S prefix applies the Scottish bands. A C prefix marks a Welsh code, which uses the same bands as England and Northern Ireland.
• Scotland sets its own rates and has more bands than the rest of the UK, so the same salary gives a different Income Tax figure there. National Insurance is not devolved, so it does not move.

The Personal Allowance taper, and why the marginal rate rises before it falls

Above a set income the Personal Allowance is withdrawn, £1 of allowance for every £2 of income above the threshold, until there is none left. Nothing on a payslip announces this, but it produces the steepest marginal rate in the system. Each extra pound you earn inside the zone is taxed at the higher rate, and it also destroys 50p of allowance, which is then taxed at the higher rate as well. Put the two together and the effective marginal Income Tax rate through the zone is 60% in England, Wales and Northern Ireland, and National Insurance on the same pound takes the all-in figure to 62%. Once the allowance has gone the effect stops and the marginal rate drops back to the additional rate, which is why a rise landing inside the zone can be worth less than the same rise above it. Scotland runs the same trap at a higher rate, so it bites harder there.

• The taper only applies where a code carries the standard allowance. A code that already grants none has nothing left to withdraw.
• The calculator measures it against your pay after any pension contribution that reduces taxable pay, so salary sacrifice or a net pay arrangement can pull you back below the threshold.
• A relief-at-source contribution also reduces adjusted net income in real life, and that is not modelled here. If you contribute that way and sit near the threshold, treat the allowance shown as the cautious answer and check your code notice.

How National Insurance is worked out

The calculator models employee Class 1 National Insurance, the kind deducted from ordinary PAYE employment. Earnings below the primary threshold attract none. Earnings between that threshold and the upper earnings limit are charged at the main rate. Earnings above the upper earnings limit are charged at a much lower one, so the bill keeps rising with pay but far more slowly past that point, which is why the deduction can look as though it has stalled on a large salary. There is no allowance to carry, no code that changes it and no regional variation, and the whole calculation is annualised: one year of earnings against one year of thresholds.

The three pension methods do three different things

How a contribution is arranged changes take-home pay more than almost any other setting on the page, because the three methods reduce different things. If you are not sure which one you are on, your payslip or scheme paperwork will say.

• Salary sacrifice: you give up part of your contractual pay and your employer pays it into the pension. It reduces both the pay Income Tax sees and the pay National Insurance sees, which is why it normally gives the highest take-home figure of the three.
• Net pay: the contribution comes out before Income Tax but after National Insurance has been worked out. Taxable pay falls; National Insurance does not.
• Relief at source: the contribution leaves your pay after both, so neither figure moves. Your provider then claims basic-rate relief from HMRC and adds it to the pot, so more arrives in the pension than left your payslip. Higher and additional-rate taxpayers claim the rest separately, and the calculator does not do that for you.
• The three are not modelled on the same base, which matters before you compare them. Salary sacrifice and net pay take the percentage you enter from full gross pay. Relief at source takes it from banded qualifying earnings, the slice of pay between a lower and an upper limit, which is smaller. The same percentage under two methods is therefore not the same contribution, and part of the difference you see is simply less money going in.
• Entering a fixed monthly amount avoids that. The amount you type is used as entered under all three methods, so the comparison is like for like.

How student loan repayments are worked out

A student loan repayment behaves nothing like tax. Each plan has an annual threshold and you repay a flat percentage of everything above it. The percentage does not step up as your pay rises, and the size of your balance makes no difference to what comes out this month. The calculator applies the threshold and rate for the plan you pick, and treats a postgraduate loan as a separate, additive deduction with its own lower threshold and its own rate, so someone repaying both sees two deductions rather than one blended figure.

• Repayments are worked out on the same earnings base as National Insurance, not on taxable income, so your tax code and Personal Allowance make no difference to them.
• That is also why a salary sacrifice pension contribution reduces what you repay, while net pay and relief at source do not.
• The figure here is annual. Real payroll assesses each plan period by period and rounds the result, so a payslip and a yearly estimate rarely reconcile to the penny.

Terms used across the calculators

These are the words the results pages use. They are defined here so that the definitions live in one place rather than being restated underneath every calculation.

• Gross salary — Pay before Income Tax, National Insurance, pension deductions, student loan deductions, and other payroll deductions.
• Take-home pay — The estimated amount left after the deductions listed in this calculation.
• Income Tax — Tax estimated on taxable income after the Personal Allowance, tax-code adjustments, and the relevant UK or Scottish Income Tax bands.
• National Insurance — Employee Class 1 National Insurance estimated on earnings above the relevant thresholds. It is calculated separately from Income Tax.
• Personal Allowance — The amount of income a standard tax code can usually receive before Income Tax. It can be reduced by tax-code changes or high-income tapering.
• Pension deductions — The pension contribution included in the estimate. Salary sacrifice, net pay, and relief-at-source methods can affect the calculation differently.
• Student loan deductions — Payroll-style repayments estimated from the selected student loan plan threshold and rate. Real payroll rounding can differ.
• PAYE — Pay As You Earn, the payroll system used to collect Income Tax and National Insurance from employment income.

What the calculator does not model

None of this makes the estimate wrong; it makes it an estimate. It models what the rules say should happen across a full year, while a payslip records what payroll actually did in one period. Where the two disagree, these are the usual reasons.

• Payroll timing. PAYE is normally cumulative and runs period by period, so a pay rise, a bonus, arrears or a late code change can make one payslip look wrong and the next one correct itself. Non-cumulative markers — W1, M1 and X — are recognised on a code but not modelled; on those, each period is taxed in isolation and an annual view will not match.
• Benefits in kind. A company car, medical cover or anything else reported on a P11D usually reaches you as a reduced tax code rather than a line on your payslip. If your code is low because of a benefit, enter the code you actually have.
• Other income. Rent, dividends, savings interest, self-employment or a second job all change your tax position and none of them are part of a PAYE salary estimate. Anything entered as other income is treated as more employment pay, which is not the same thing.
• Gift Aid and personal pension top-ups. Both extend your basic-rate band and reduce adjusted net income in real life. Neither is modelled, so if you give or contribute meaningfully your real tax will be lower than shown.
• Employer National Insurance. Only employee contributions appear. What your employer pays is a cost to them, never a deduction from you.
• Anything resting on records the calculator cannot see: HMRC's view of your year, an underpayment being collected through your code, an attachment of earnings order, or an employer-specific payroll adjustment. It cannot decide whether your payroll is correct, and it cannot decide entitlement. Where a figure matters, check it against your payslip, your code notice or the official guidance.

Where the figures come from, and when they were last checked

No page on this site carries a rate of its own. Every threshold, band and rate sits in one shared configuration for the tax year, and each page reads from it, so a figure cannot drift on one page and stay right on another. The 2026/27 rules were last reviewed on 2026-08-07, and each records the official page it came from and the date that page was read.

• GOV.UK Income Tax rates and Personal Allowances — read 2026-05-08
• Scottish Government Income Tax rates and bands — read 2026-05-08
• GOV.UK National Insurance rates and allowances — read 2026-05-08
• Student loan thresholds and rates come from GOV.UK repayment guidance, and pension qualifying earnings limits from the automatic-enrolment thresholds. The sources page carries the links themselves.
• An automated check runs the real calculation engine against those published figures, taper zone included, as part of the checks every release runs, so a mistyped threshold is caught before it reaches a page.

Check us against your payslip: three verification cases

Three standard cases, computed by the engine at build time on the 2026/27 rules — the standard tax code, no pension, no student loan, outside Scotland, and all three below the income where the Personal Allowance taper begins, so an unamended standard code reproduces them. Annualised figures divided by twelve, so a real monthly payslip on the cumulative basis can sit pennies away; anything more than pennies means an assumption differs, and the sections above say which assumptions matter. The same automated comparison runs against every pre-rendered answer on the site on every build.

How this site is checked, and what to do when it is wrong

Every page comes from one set of data and one calculation engine, and a release is not cut while its checks fail. Before any release: the engine's results are compared against a hand-typed table of expected figures derived from the published rates, so the engine cannot quietly agree with its own configuration; every worked example, calculation table and pre-rendered calculator answer is recomputed against the engine, so those figures cannot drift from what the engine produces; prose is kept figure-free by policy, with a check that catches configured values typed into text; and the configured rates are checked against the recorded GOV.UK citations with their retrieval dates. Pages carry the date their rules were last reviewed, and the tax year updates page states the current figures with their effective dates.

New and rewritten content is reviewed against the official source before it ships, and claims about statute are checked against the legislation's own terms rather than summaries. Where a limitation exists — payroll timing, benefits in kind, non-standard National Insurance letters — the policy is to state it on the page rather than approximate silently.

If a figure on this site looks wrong, the contact page is the route to report it. A confirmed error is corrected in the shared configuration or engine, which corrects every page that used it at the next build, and the check that missed it is extended so the same class of error fails the build in future.