UK Salary Calculator — How to Use It
Enter your annual gross salary, pension contribution percentage, and student loan plan. The calculator instantly shows your annual and monthly take-home pay, effective tax rate, and a full breakdown of every deduction — all based on 2025/26 HMRC rates.
UK Income Tax Bands 2025/26
- Personal Allowance (0%): First £12,570. No income tax is paid on this amount.
- Basic rate (20%): Earnings from £12,571 to £50,270.
- Higher rate (40%): Earnings from £50,271 to £125,140.
- Additional rate (45%): Earnings above £125,140.
Important: Your Personal Allowance reduces by £1 for every £2 you earn above £100,000. At £125,140 income, the allowance is completely lost — effectively creating a 60% marginal tax rate between £100,000 and £125,140.
National Insurance Contributions (Class 1) 2025/26
- Below £12,570/year: No NI payable.
- £12,570 to £50,270/year: 8% employee NI contribution.
- Above £50,270/year: 2% on the excess.
How Pension Contributions Reduce Your Tax Bill
Workplace pension contributions deducted via salary sacrifice reduce your gross pay before tax and NI are calculated. This means you save Income Tax at your marginal rate AND save National Insurance — making salary sacrifice particularly efficient. A basic rate taxpayer putting in 5% (£2,000/year on a £40,000 salary) saves around £400 in tax and £160 in NI — effectively a 28% boost to their contribution from the government and HMRC.
Student Loan Repayment Thresholds
Student loan repayments are 9% of income above each plan's threshold:
- Plan 1 (pre-September 2012 UK/EU loans): Repay above £24,990/year.
- Plan 2 (September 2012–2023, England/Wales): Repay above £27,295/year.
- Plan 4 (Scotland): Repay above £31,395/year.
- Plan 5 (new loans from August 2023): Repay above £25,000/year.
How to Increase Your Take-Home Pay
- Check you are on the correct tax code — errors are common. Your code should be 1257L for a standard allowance.
- Maximise salary sacrifice pension contributions to shift income below the 40% threshold.
- Claim legitimate expense allowances and HMRC working from home relief if eligible.
- Consider flexible benefits: some employers let you trade salary for tax-efficient benefits like cycle-to-work or extra annual leave.
Related Calculators
- Mortgage Calculator — See what salary you need to afford a property.
- Budget Planner — Allocate your take-home pay across monthly expenses.
- ISA Calculator — See how much of your net pay you can grow tax-free.
- Retirement Calculator — Plan how much of your salary to save for retirement.