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Summary
The take-home pay calculator converts a gross annual salary into the net amount you actually receive after all statutory deductions and adjustments: income tax, National Insurance (NI), student loan repayments, pension contributions, Annual Allowance charges, Benefits in Kind tax, Gift Aid relief, salary sacrifice schemes, payroll giving, and the High Income Child Benefit Charge.
How it works
UK take-home pay is calculated by subtracting deductions from gross salary and applying adjustments:
Core deductions:
- Income tax — progressive bands (20%, 40%, 45%) applied to taxable income after the Personal Allowance
- National Insurance — employee contributions at 8% (above the Primary Threshold) and 2% (above the Upper Earnings Limit)
- Student loan — 9% of income above the plan-specific threshold (Plans 1, 2, 4, 5) or 6% (Postgraduate)
- Pension — employee contribution as a percentage of gross salary (salary sacrifice or relief at source)
- Annual Allowance charge — tax on pension contributions exceeding the Annual Allowance, paid via Self Assessment
Additional adjustments:
- Benefits in Kind (P11D) — company car, private medical, etc. You pay income tax on the benefit value but receive no extra cash, reducing take-home
- Gift Aid donations — extends the basic rate band for higher/additional rate taxpayers, giving relief via Self Assessment
- Payroll giving (GAYE) — donations deducted before income tax (but after NI), providing immediate tax relief
- Salary sacrifice (non-pension) — Cycle to Work, EV leasing, childcare vouchers — reduces gross before tax and NI
- High Income Child Benefit Charge — claws back Child Benefit via Self Assessment when adjusted net income exceeds £60,000
The Personal Allowance taper
For incomes over £100,000, the £12,570 Personal Allowance is reduced by £1 for every £2 of income above £100,000. This creates an effective 60% marginal tax rate between £100,000 and £125,140.
The Pension Annual Allowance
The Annual Allowance (AA) is the maximum amount of pension savings you can make each year with tax relief. For 2025/26 the standard AA is £60,000.
Tapered Annual Allowance: For high earners, the AA is reduced when both conditions are met:
- Threshold income exceeds £200,000 (gross income minus personal pension contributions)
- Adjusted income exceeds £260,000 (threshold income plus all pension contributions including employer)
When both conditions are met, the AA reduces by £1 for every £2 of adjusted income above £260,000, down to a minimum of £10,000 (reached at £360,000 adjusted income).
Money Purchase Annual Allowance (MPAA): If you have flexibly accessed your pension (e.g. taken a drawdown), the AA for money purchase contributions is reduced to £10,000.
Carry forward: You can carry forward unused AA from the previous 3 tax years, allowing larger contributions without a charge. This is particularly useful after a bonus or when salary sacrifice optimisation was not used in prior years.
Annual Allowance Charge: Pension contributions exceeding the total available allowance (AA + carry forward) are taxed at your marginal income tax rate. This charge is paid via Self Assessment, not deducted by your employer.
Allowances & exemptions
Blind Person’s Allowance (BPA): Adds to the Personal Allowance. Available to individuals registered as blind or severely sight impaired. Amount varies by tax year: £3,070 (2024/25), £3,130 (2025/26), £3,250 (2026/27).
Marriage Allowance: A spouse or civil partner can transfer £1,260 of their unused Personal Allowance to the higher earner, saving up to £252/year. The recipient must be a basic rate taxpayer.
NI exemption: Employees over state pension age or otherwise exempt do not pay National Insurance.
Salary sacrifice (non-pension)
Salary sacrifice reduces gross salary before tax and NI are calculated. The calculator supports four common schemes:
- Cycle to Work — typically 12-month arrangement for bicycle purchase
- EV salary sacrifice — electric vehicle lease with significant tax advantages (low BIK rate)
- Childcare vouchers — legacy scheme (closed to new entrants since October 2018), up to £55/week tax-free
- Other — any additional salary sacrifice arrangement
Benefits in Kind (P11D)
Your employer reports the taxable value of non-cash benefits on your P11D. Common examples: company car, private medical insurance, gym membership. You pay income tax on the benefit value but receive no extra cash — so it reduces your effective take-home pay.
Gift Aid & payroll giving
Gift Aid: When you donate to charity, the charity claims 25% from HMRC. As a higher or additional rate taxpayer, you can claim the difference (20% or 25%) via Self Assessment. The calculator models this by extending the basic rate band.
Payroll giving (Give As You Earn): Donations are deducted from gross pay before income tax (but after NI). This provides immediate tax relief without needing to claim via Self Assessment.
High Income Child Benefit Charge (HICBC)
From 2024/25, the HICBC applies when adjusted net income exceeds £60,000. Between £60,000 and £80,000, the charge claws back 1% of Child Benefit for every £200 of income above £60,000. Above £80,000, 100% of Child Benefit is clawed back. The charge is paid via Self Assessment.
Child Benefit rates (2025/26): £26.05/week for the eldest child, £17.25/week for each subsequent child.
Overtime & bonus
The calculator adds overtime and bonus to gross salary before calculating deductions:
- Overtime: Calculated from contractual hours, overtime hours/month, and a rate multiplier (e.g. 1.5x for time-and-a-half)
- Bonus: Either a fixed annual amount or a percentage of base salary
Employer NI
Employer NI is shown as informational context — it is paid on top of your salary by your employer. For 2025/26: 15% on earnings above the Secondary Threshold (£5,000).
The formula
Where
Worked examples
£50,000 salary, no student loan, 5% pension (salary sacrifice)
Pension contribution (5% of gross)
= £2,500
Taxable income (gross - pension - Personal Allowance)
= £34,930
Income tax (all within basic rate band)
= £6,986
Employee NI (8% on £12,570-£50,270)
= £2,994
AA check: £2,500 pension << £60,000 allowance
= £0
Net annual pay
= £37,520 (£3,127/month)
Result
Take-home pay = £37,520/year = £3,127/month
£300,000 salary, 20% pension (salary sacrifice), no carry forward
Pension contribution (20% of gross)
= £60,000
Threshold income (for taper test)
= £300,000 > £200,000
Adjusted income (for taper test)
= £360,000 > £260,000
Tapered Annual Allowance
= £10,000 (minimum)
Excess pension contributions
= £50,000
AA Charge (excess x marginal rate 45%)
= £22,500 (via Self Assessment)
Net annual pay (after all deductions inc. AA charge)
= Significantly reduced by AA charge
Result
The AA charge of £22,500 is a real tax liability that reduces your effective take-home pay.
Inputs explained
Core inputs:
- Gross salary — your annual salary before any deductions, as stated in your employment contract
- Tax code — determines your Personal Allowance. Standard is 1257L (£12,570 PA). Presets: 1257L, BR (basic rate only), D0 (higher rate only), 0T (no PA), S1257L (Scottish)
- Scottish taxpayer — Scottish residents pay different income tax rates set by the Scottish Parliament
Pension & student loans:
- Pension contribution — the percentage of your salary you contribute. UK auto-enrolment minimum is 5% (3% employee + 2% often bundled)
- Pension type — salary sacrifice (reduces gross before tax and NI) or relief at source (reduces gross for tax only)
- Employer pension contribution — the percentage your employer contributes. Counts towards the Annual Allowance but does not reduce your take-home pay
- Carry forward — unused Annual Allowance from the previous 3 tax years. Allows larger contributions without a charge
- MPAA — if you have flexibly accessed your pension, the Annual Allowance is reduced to £10,000
- Student loan plan — Plans 1, 2, 4, 5 (9% above threshold) and Postgraduate (6% above threshold)
Allowances & exemptions:
- No NI — over state pension age or otherwise exempt from National Insurance
- Blind Person’s Allowance — adds £3,070 to the Personal Allowance
- Marriage Allowance — spouse transfers £1,260 of their PA, saving up to £252/year
- Number of children — for High Income Child Benefit Charge calculation
Overtime & bonus:
- Overtime — hours per month with rate multiplier, or a fixed annual amount
- Bonus — fixed £ amount or percentage of base salary
Salary sacrifice (non-pension):
- Cycle to Work — monthly sacrifice for bicycle lease
- EV salary sacrifice — monthly sacrifice for electric vehicle lease
- Childcare vouchers — legacy scheme, monthly sacrifice
- Other sacrifice — any other non-pension salary sacrifice arrangement
Benefits & charitable giving:
- Benefits in Kind (P11D) — annual taxable value of non-cash benefits (company car, private medical, etc.)
- Gift Aid donations — annual total. Extends the basic rate band for higher/additional rate relief
- Payroll giving (GAYE) — monthly charitable donation deducted before income tax
Outputs explained
- Annual/monthly/weekly/4-weekly/2-weekly net pay — the amount deposited into your bank account after all deductions
- Effective tax rate — total deductions as a percentage of gross salary
- Marginal rate — the tax rate on the next £1 you earn (important for pay rise decisions)
- Salary percentile — where your salary sits in the UK full-time earnings distribution (ONS ASHE 2024)
- Breakdown table — detailed split of deductions by annual, monthly, and weekly periods, including tax band sub-rows
- Personal Allowance — shown in the breakdown with taper warning when income exceeds £100,000
- Pension Annual Allowance — your available allowance (standard or tapered), usage, carry forward, and any AA charge
- Employer NI — informational: the amount your employer pays on top of your salary
- Adjusted net income — affects Child Benefit charge, childcare eligibility, and PA taper
- Child Benefit — annual entitlement, High Income Charge, and net benefit after clawback
Tax year constants
The calculator supports three tax years. All rates are verified against gov.uk official sources.
Income tax (England, Wales, NI) — all three years identical
| Band | Rate | Taxable income range |
|---|---|---|
| Basic | 20% | £0–£37,700 |
| Higher | 40% | £37,701–£112,570 |
| Additional | 45% | Over £112,570 |
Personal Allowance frozen at £12,570 through April 2028 (legislated to April 2031).
Scottish income tax
| Band | 2024/25 | 2025/26 | 2026/27 |
|---|---|---|---|
| Starter (19%) | £12,571–£14,876 | £12,571–£15,397 | £12,571–£16,537 |
| Basic (20%) | £14,877–£26,561 | £15,398–£27,491 | £16,538–£29,526 |
| Intermediate (21%) | £26,562–£43,662 | £27,492–£43,662 | £29,527–£43,662 |
| Higher (42%) | £43,663–£75,000 | £43,663–£75,000 | £43,663–£75,000 |
| Advanced (45%) | £75,001–£125,140 | £75,001–£125,140 | £75,001–£125,140 |
| Top (48%) | Over £125,140 | Over £125,140 | Over £125,140 |
National Insurance (employee)
| 2024/25 | 2025/26 | 2026/27 | |
|---|---|---|---|
| Primary Threshold | £12,570 | £12,570 | £12,570 |
| Upper Earnings Limit | £50,270 | £50,270 | £50,270 |
| Main rate | 8% | 8% | 8% |
| Additional rate | 2% | 2% | 2% |
National Insurance (employer)
| 2024/25 | 2025/26 | 2026/27 | |
|---|---|---|---|
| Secondary Threshold | £9,100 | £5,000 | £5,000 |
| Rate | 13.8% | 15% | 15% |
The employer NI rate increased from 13.8% to 15% and the secondary threshold dropped from £9,100 to £5,000 from April 2025 (Autumn Budget 2024).
Student loan thresholds
| Plan | 2024/25 | 2025/26 | 2026/27 |
|---|---|---|---|
| Plan 1 (9%) | £24,990 | £26,065 | £26,900 |
| Plan 2 (9%) | £27,295 | £28,470 | £29,385 |
| Plan 4 (9%) | £31,395 | £32,745 | £33,795 |
| Plan 5 (9%) | £25,000 | £25,000 | £25,000 |
| Postgrad (6%) | £21,000 | £21,000 | £21,000 |
Other allowances
| 2024/25 | 2025/26 | 2026/27 | |
|---|---|---|---|
| Blind Person’s Allowance | £3,070 | £3,130 | £3,250 |
| Marriage Allowance | £1,260 | £1,260 | £1,260 |
| Child Benefit (eldest) | £25.60/wk | £26.05/wk | £27.05/wk |
| Child Benefit (subsequent) | £16.95/wk | £17.25/wk | £17.90/wk |
| HICBC threshold | £60,000 | £60,000 | £60,000 |
| HICBC full clawback | £80,000 | £80,000 | £80,000 |
| Pension AA | £60,000 | £60,000 | £60,000 |
| MPAA | £10,000 | £10,000 | £10,000 |
Assumptions & limitations
- Assumes PAYE employment — not self-employed (which has different NI rates and payment schedules)
- The calculator uses annual figures — it does not account for mid-year salary changes or cumulative PAYE adjustments
- AA charge is estimated at the marginal income tax rate — in practice the charge is added to taxable income which may push you into a higher band
- Child Benefit rates assume 52 weeks per year for simplicity
- Employer NI is informational only — it is not deducted from your pay
- K code tax adjustments are supported but rarely used in practice
Verification
| Test case | Gross | Expected net (approx.) | Verified against |
|---|---|---|---|
| Basic rate | £30,000 | ~£24,600 | HMRC tax calculator |
| Higher rate | £60,000 | ~£43,900 | HMRC tax calculator |
| PA taper zone | £110,000 | ~£73,600 | HMRC tax calculator |
| Additional rate | £200,000 | ~£126,000 | HMRC tax calculator |
| AA charge (£300k, 20% pension) | £300,000 | Reduced by AA charge | gov.uk annual allowance rules |
Accounting identity: gross = net + pension + incomeTax + employeeNI + studentLoan + aaCharge — verified in unit tests for every test case.
Sources
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