UK take-home pay explained: tax, NI, loans and pensions

このコンテンツは英語です。

Your salary is the number in your contract, but your take-home pay is the number that lands in your bank account, and the gap between the two can be surprisingly large. This guide walks through each deduction in plain English, using the 2026/27 tax year rules for England (6 April 2026 to 5 April 2027), checked October 2026 against GOV.UK. It finishes with worked examples at £25,000, £40,000, £60,000 and £100,000.

Valtrinity 編。更新日：2026年10月18日。

What take-home pay really means

Take-home pay, sometimes called net pay, is what remains of your gross salary after your employer has deducted income tax, National Insurance, any student or postgraduate loan repayments and any pension contributions you make through payroll. Your employer handles all of this through the Pay As You Earn system, so most employees never fill in a tax return and simply see the final figure on their payslip.

It helps to separate deductions into two groups. Some are legal obligations that depend on how much you earn: income tax and National Insurance. Others depend on your personal circumstances: student loan repayments, pension contributions, and benefits taken through payroll such as cycle to work schemes. Understanding which group a deduction falls into makes it easier to see what you can and cannot change.

Everything in this guide applies to an employee in England on a standard tax code with a single job. Scotland sets its own income tax bands, so Scottish taxpayers will see different results, and anyone with several jobs, benefits in kind or self-employed income will need to adjust. All figures use the 2026/27 tax year, and we checked them in October 2026.

Income tax in England for 2026/27

Income tax is charged in bands. The first £12,570 of your income is your Personal Allowance and is taxed at 0%. Taxable income from £12,571 up to £50,270 is charged at the basic rate of 20%. Income from £50,271 up to £125,140 is charged at the higher rate of 40%, and anything above £125,140 is charged at the additional rate of 45%.

The key idea is that each rate applies only to the slice of income that falls within its band. Earning £51,000 does not mean all of your income is taxed at 40%. Only the £730 above £50,270 is taxed at that rate, while everything below it is taxed as before. Moving into a higher band therefore never leaves you worse off in take-home terms.

The standard tax code for most employees is 1257L, which reflects the £12,570 Personal Allowance. Your employer applies the allowance gradually across the year, so each payslip includes a twelfth of it if you receive monthly pay. The Autumn Budget 2025 extended the period for which these thresholds stay frozen, and the government has said they will remain at current levels until April 2031. In practice, that means pay rises can push more of your income into higher bands over time.

• Personal Allowance: £12,570 at 0%
• Basic rate: 20% on taxable income up to £50,270
• Higher rate: 40% on income from £50,271 to £125,140
• Additional rate: 45% on income above £125,140

National Insurance for employees

National Insurance is separate from income tax. It builds your entitlement to benefits such as the State Pension, and it is charged on your earnings rather than on your taxable income. For most employees (category letter A) in 2026/27, you pay nothing on earnings up to £242 a week, which is £1,048 a month or £12,570 a year. You pay 8% on earnings between that point and £967 a week (£4,189 a month, or £50,270 a year), and 2% on anything above.

Unlike income tax, National Insurance is worked out on each pay period rather than across the whole year, so a large bonus in one month can attract the lower 2% rate only on the part that exceeds the monthly limit. Over a full year of regular pay the annual figures give a very close estimate.

Employer National Insurance is a separate cost that your employer pays on top of your salary. It does not come out of your pay, so it does not appear in the calculations in this guide.

Student loan and postgraduate loan repayments

Student loan repayments are not a tax, but they are collected through payroll and reduce your take-home pay in the same way. You repay a percentage of the income above your plan's threshold, regardless of how much you owe. For 2026/27 the thresholds on GOV.UK are £26,900 a year for Plan 1, £29,385 for Plan 2 and £25,000 for Plan 5. The repayment rate for these plans is 9% of the amount above the threshold.

A Postgraduate Loan has a threshold of £21,000 a year and a repayment rate of 6%. If you have both an undergraduate plan and a postgraduate loan, the two repayments are collected together, so you pay 9% above the undergraduate threshold and 6% above £21,000. Plan 4, which applies to Scottish loans, has its own threshold; check GOV.UK for the current figure.

Repayments are calculated on each job separately, and they stop when you earn below the threshold in a pay period. The balance is written off after a set number of years, for example 30 years for Plan 2 and 40 years for Plan 5, counted from when you were first due to start repaying.

How pension contributions change the picture

Pension contributions are the deduction that most often improves your long-term position, because they attract tax relief. How the relief reaches you depends on the type of scheme. With a net pay arrangement, your employer takes the contribution from your pay before income tax is calculated, so you receive relief at your marginal rate automatically. National Insurance is still worked out on the full salary under this arrangement.

With relief at source, which is used by personal and stakeholder pensions and some workplace schemes, your contribution comes from pay that has already been taxed, and the pension provider claims 20% basic rate relief and adds it to your pot. If you pay income tax at 40% or 45%, you can claim the extra relief through Self Assessment or HMRC's online claim service. In England, that gives an extra 20% or 25% on contributions up to the income you were taxed on at the relevant rate.

Relief is limited to contributions worth up to 100% of your annual earnings, and an annual allowance sets a separate ceiling on how much can go in each year with tax advantages. Check the current allowance on GOV.UK before making large contributions.

A simple way to think about it: if you earn £60,000 and put £3,000 into a net pay scheme, your take-home pay does not fall by £3,000. It falls by £1,800, because £1,200 of that contribution would otherwise have been taxed at 40%.

Worked examples: £25,000 and £40,000

At £25,000, your taxable income is £25,000 minus the £12,570 allowance, which is £12,430. At 20% that gives income tax of £2,486. National Insurance is 8% of the same £12,430, which is £994.40. Total deductions are £3,480.40, leaving £21,519.60 a year, or roughly £1,793 a month. That is an effective deduction rate of about 13.9%. No student loan repayment is due on Plan 1, Plan 2 or Plan 5 at this salary because it falls at or below each threshold, although a Postgraduate Loan would take 6% of the £4,000 above £21,000, which is £240 a year.

At £40,000, taxable income is £27,430. Income tax at 20% is £5,486, and National Insurance at 8% is £2,194.40. That leaves £32,319.60 a year before any loan, or roughly £2,693 a month. The total deduction rate is about 19.2%. If you are on Plan 2, you repay 9% of the £10,615 above £29,385, which is £955.35 a year. Take-home pay then becomes £31,364.25, or roughly £2,614 a month.

Worked examples: £60,000 and £100,000

At £60,000, you move into the higher rate. The basic rate band is £37,700 wide (from £12,570 to £50,270), so £7,540 is charged at 20%. The remaining £9,730 above £50,270 is charged at 40%, which is £3,892. Total income tax is £11,432. National Insurance is 8% of £37,700 (£3,016) plus 2% of £9,730 (£194.60), a total of £3,210.60. Take-home pay is £45,357.40 a year, roughly £3,780 a month, an overall deduction rate of about 24.4%. On Plan 2, the student loan repayment is 9% of £30,615, which is £2,755.35, bringing take-home pay down to £42,602.05, or roughly £3,550 a month.

At £100,000, income tax is £7,540 at 20% plus £19,892 at 40% (on £49,730), a total of £27,432. National Insurance is £3,016 plus 2% of £49,730 (£994.60), a total of £4,010.60. Take-home pay is £68,557.40 a year, roughly £5,713 a month, with an overall deduction rate of about 31.4%. On Plan 2, the student loan repayment is £6,355.35, which would reduce take-home pay to £62,202.05.

These are annual estimates using the standard allowance and no pension. Payroll software works period by period, so your actual payslips may differ by small amounts.

The £100,000 allowance taper

Once your adjusted net income goes above £100,000, your Personal Allowance reduces by £1 for every £2 of income above that level. It reaches zero at £125,140. Between those points, each extra £1 of income effectively costs you 60p in income tax: 40p on the pound earned and a further 20p because you lose allowance that would otherwise have been exempt from tax.

Here is how that looks at £110,000. The allowance falls by £5,000 to £7,570, so taxable income is £102,430. Income tax is £7,540 on the first £37,700, plus £25,892 on the remaining £64,730, a total of £33,432. That is £6,000 more tax than at £100,000, on only £10,000 of extra earnings. Add 2% National Insurance and the marginal rate is 62%, rising to 71% if you also repay a Plan 2 student loan.

This is why people in this range often look at pension contributions. A gross pension contribution reduces adjusted net income, so a £10,000 contribution at £110,000 brings income back to £100,000 and restores the full allowance. Whether that suits you depends on your circumstances, and it is worth checking the rules on GOV.UK or asking a regulated adviser.

What can change your own figures

Several things can move your real take-home pay away from the examples above. A different tax code, for example because of underpaid tax from a previous year, company benefits such as a car or medical insurance, or a second job all change how much tax is collected. Bonuses are taxed along with the rest of your pay, so a large payment can feel heavily taxed in the month you receive it even though the annual tax is calculated in the same way.

If you live in Scotland, the income tax bands are different from those described here, so a Scottish calculation needs separate rates. Self-employed people pay different National Insurance classes and use Self Assessment rather than payroll.

Your payslip is the best source for your actual deductions, and your tax code appears on it. If anything looks wrong, contact your employer's payroll team or HMRC. For a quick estimate before you accept a job offer or ask for a rise, use the calculator linked below and compare the result with the worked examples in this guide.

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