UK Salary Calculator 2025/26

How UK Salary Tax Is Calculated

When you receive a salary in the UK, your employer deducts income tax and National Insurance contributions before paying you. The amount deducted depends on how much you earn and which tax bands your income falls into. Understanding these deductions helps you plan your finances and evaluate job offers more realistically.

Everyone in the UK is entitled to a personal allowance — the amount you can earn tax-free each year. For 2025/26, this is £12,570. Income above that threshold is taxed at the basic rate of 20% up to £50,270, the higher rate of 40% up to £125,140, and the additional rate of 45% on anything above that. If your income exceeds £100,000, your personal allowance is gradually withdrawn, creating an effective marginal rate of 60% on income between £100,000 and £125,140.

National Insurance is a separate deduction from income tax. Employees pay Class 1 contributions at 8% on earnings between the primary threshold (£12,570) and the upper earnings limit (£50,270), and 2% on earnings above the upper limit. Unlike income tax, NI does not have a tax-free personal allowance — the threshold simply mirrors it for 2025/26.

Your effective tax rate — the combined percentage of your gross salary that goes to tax and NI — is always lower than your marginal rate. For example, someone earning £35,000 pays roughly 20.5% overall, even though their marginal income tax rate is 20%. The difference arises because the first £12,570 is tax-free and the NI threshold mirrors that amount.

Example Salary Calculations

The following examples show what you can expect to take home at three common salary levels. All figures use 2025/26 rates for England, Wales, and Northern Ireland.

£25,000 per year

On a gross salary of £25,000, you would pay approximately £2,486 in income tax and £994 in National Insurance, leaving you with around £21,520 per year — roughly £1,793 per month. Your effective tax rate would be about 13.9%.

£45,000 per year

At £45,000, your income tax bill rises to around £6,486 because more of your earnings fall within the basic rate band. National Insurance adds approximately £2,594, bringing your total deductions to about £9,080. That gives you take-home pay of roughly £35,920 per year, or £2,993 per month. The effective rate is around 20.2%.

£80,000 per year

Earning £80,000 places part of your income in the higher rate band. You would pay approximately £19,432 in income tax and around £3,611 in National Insurance, totalling roughly £23,043 in deductions. Your net pay comes to about £56,957 per year or £4,746 per month, with an effective tax rate of approximately 28.8%.

Understanding Your Payslip

Your payslip shows your gross pay at the top, followed by deductions for income tax (labelled "PAYE") and National Insurance. Your tax code, usually shown near the top, tells your employer how much personal allowance to apply. The standard code for 2025/26 is 1257L, which corresponds to a £12,570 allowance. If your code is different, your deductions may not match the figures from this calculator exactly.

Other items you might see on your payslip include pension contributions, student loan repayments, and salary sacrifice schemes. These are not covered by this calculator but will further reduce your take-home pay. If you are unsure about any figure on your payslip, your employer's payroll department or HMRC can clarify.