How to Calculate Your Take-Home Pay in the UK (2025)

Your take-home pay – also called net pay – is what you actually receive in your bank account after income tax, National Insurance, and other deductions are removed. Understanding exactly what you'll take home is crucial for budgeting, comparing job offers, and planning your finances.

With the personal allowance frozen at £12,570 and National Insurance at 8% for 2025/26, a £30,000 salary gives you approximately £24,324 take-home (£2,027/month). But the calculation varies significantly based on your earnings, pension contributions, and student loans.

Quick Summary

Personal allowance: £12,570 tax-free in 2025/26
Income tax rates: 20%, 40%, 45% on income above allowance
National Insurance: 8% on earnings above £12,570 annually
Average deductions: Roughly 19-25% for most UK earners
Use our calculator: Get instant accurate results

Understanding UK Salary Deductions

Your gross salary is reduced by several deductions before you receive your net pay:

1. Income Tax

Charged on earnings above your personal allowance (£12,570):

Tax bands 2025/26 (England, Wales, NI):

Personal allowance: £0-£12,570 (0%)
Basic rate: £12,571-£50,270 (20%)
Higher rate: £50,271-£125,140 (40%)
Additional rate: £125,140+ (45%)

The 60% trap: Earn £100,000-£125,140? Your personal allowance reduces by £1 for every £2 earned, creating an effective 60% tax rate.

2. National Insurance Contributions (NICs)

Employee NICs for 2025/26:

£0-£12,570: 0%
£12,571-£50,270: 8%
£50,270+: 2%

Lower than previous years: The rate was 12% until 2024, then 10%, now 8% – a significant saving.

3. Student Loan Repayments

If you have a student loan:

Plan 1: 9% on earnings above £26,065
Plan 2: 9% on earnings above £28,470
Plan 4: 9% on earnings above £32,745
Plan 5: 9% on earnings above £25,000
Postgraduate: 6% on earnings above £21,000

4. Pension Contributions

Workplace pensions are usually deducted before tax (salary sacrifice or relief at source):

Typical contribution: 5% employee + 3% employer
Higher contributions reduce both tax and NI

5. Other Deductions

Childcare vouchers
Give As You Earn (charity donations)
Union subscriptions
Private healthcare

Real Salary Examples: Take-Home Pay 2025/26

Let's see exactly what different salaries pay after tax and NI:

Salary: £20,000

Income tax: £1,486
National Insurance: £594
Total deductions: £2,080
Take-home pay: £17,920/year (£1,493/month)
Effective rate: 10.4%

Salary: £25,000

Income tax: £2,486
National Insurance: £994
Total deductions: £3,480
Take-home pay: £21,520/year (£1,793/month)
Effective rate: 13.9%

Salary: £30,000

Income tax: £3,486
National Insurance: £1,394
Total deductions: £4,880
Take-home pay: £25,120/year (£2,093/month)
Effective rate: 16.3%

Salary: £35,000

Income tax: £4,486
National Insurance: £1,794
Total deductions: £6,280
Take-home pay: £28,720/year (£2,393/month)
Effective rate: 17.9%

Salary: £40,000

Income tax: £5,486
National Insurance: £2,194
Total deductions: £7,680
Take-home pay: £32,320/year (£2,693/month)
Effective rate: 19.2%

Salary: £50,000 (Higher Rate Threshold)

Income tax: £7,486
National Insurance: £2,994
Total deductions: £10,480
Take-home pay: £39,520/year (£3,293/month)
Effective rate: 21.0%

Salary: £60,000

Income tax: £11,486
National Insurance: £3,194
Total deductions: £14,680
Take-home pay: £45,320/year (£3,777/month)
Effective rate: 24.5%

Salary: £75,000

Income tax: £17,486
National Insurance: £3,694
Total deductions: £21,180
Take-home pay: £53,820/year (£4,485/month)
Effective rate: 28.2%

Salary: £100,000 (60% Trap Begins)

Income tax: £27,486
National Insurance: £4,194
Total deductions: £31,680
Take-home pay: £68,320/year (£5,693/month)
Effective rate: 31.7%

Salary: £150,000

Income tax: £49,486
National Insurance: £5,194
Total deductions: £54,680
Take-home pay: £95,320/year (£7,943/month)
Effective rate: 36.5%

How to Calculate Your Take-Home Pay

Step 1: Calculate Taxable Income

Your salary minus personal allowance:

Gross salary: £35,000
Personal allowance: -£12,570
Taxable income: £22,430

Step 2: Calculate Income Tax

Apply tax rates to your taxable income:

£22,430 × 20% = £4,486 income tax

Step 3: Calculate National Insurance

Apply NI rates to earnings above threshold:

Earnings above £12,570: £22,430
£22,430 × 8% = £1,794 National Insurance

Step 4: Calculate Net Pay

Subtract deductions from gross:

Gross: £35,000
Income tax: -£4,486
National Insurance: -£1,794
Net pay: £28,720 (£2,393/month)

The 60% Tax Trap Explained

Between £100,000-£125,140, you face an effective 60% tax rate:

Why?

Your personal allowance reduces by £1 for every £2 earned above £100k
You lose £12,570 of allowance over £25,140
This adds 20% tax on top of 40% higher rate

Example: £110,000 salary

Personal allowance left: £7,570 (£12,570 - £5,000)
Effective tax rate on £100k-£125k: 60%
Total take-home: £71,227 (35% effective overall)

Strategies to avoid:

Increase pension contributions
Use salary sacrifice schemes
Consider timing of bonuses

Impact of Pension Contributions

Pensions dramatically improve take-home through tax relief:

£40,000 Salary with 5% Pension

Option A: No pension sacrifice

Gross: £40,000
Tax: £5,486
NI: £2,194
Take-home: £32,320

Option B: 5% pension sacrifice (£2,000)

Gross after sacrifice: £38,000
Tax: £5,086 (saves £400)
NI: £2,034 (saves £160)
Take-home: £30,880
Pension contribution: £2,000
Total benefit: £31,440 vs £32,320

Net cost: Only £880 for £2,000 pension

£60,000 Salary with 10% Pension

Salary sacrifice £6,000:

Saves £2,400 income tax (40%)
Saves £480 NI (8%)
Net cost: £3,120
Actual pension gain: £6,000
Effective saving: 52%

Student Loan Impact on Take-Home

Student loans significantly reduce net pay:

£35,000 with Plan 2 Loan

Without student loan:

Take-home: £28,720/year

With Plan 2 loan:

Threshold: £28,470
Repayment: (£35,000 - £28,470) × 9% = £588/year
Take-home: £28,132/year (£2,344/month)

£50,000 with Plan 2 + Postgraduate Loans

Plan 2 repayment:

(£50,000 - £28,470) × 9% = £1,938/year

Postgraduate repayment:

(£50,000 - £21,000) × 6% = £1,740/year

Total student loan: £3,678/year (£306/month) Take-home after loans: £35,842/year (£2,987/month)

Using Our Take-Home Pay Calculator

Skip manual calculations:

Enter your annual gross salary
Select your location (England/Wales/NI or Scotland)
Add pension contributions (if any)
Include student loans (select your plan)
Get instant results:
- Monthly take-home
- Annual take-home
- All deductions breakdown
- Effective tax rate

Calculate Your Take-Home Pay →

Regional Differences: Scotland

Scotland has different income tax rates:

Scottish Tax Bands 2025/26

Personal allowance: £0-£12,570 (0%)
Starter rate: £12,571-£15,397 (19%)
Basic rate: £15,398-£27,491 (20%)
Intermediate rate: £27,492-£43,662 (21%)
Higher rate: £43,663-£75,000 (42%)
Advanced rate: £75,001-£125,140 (45%)
Top rate: £125,140+ (48%)

Scottish earners pay more tax than England/Wales/NI earners above ~£28,000.

£40,000 Comparison

England/Wales/NI:

Take-home: £32,320 (80.8%)

Scotland:

Take-home: £31,571 (78.9%)
Difference: £749 less per year

Comparing Job Offers

When comparing salaries, always compare take-home:

Job A: £45,000 + 5% pension match

Take-home: ~£35,000
Pension: £2,250 × 2 = £4,500
Total package: £39,500

Job B: £48,000 + 3% pension

Take-home: ~£37,200
Pension: £1,440 × 2 = £2,880
Total package: £40,080

Job B pays £2,580 more despite seeming similar.

Consider:

Pension contributions
Bonuses
Location (Scotland vs England)
Benefits (healthcare, car, etc.)

How to Increase Your Take-Home Pay

1. Salary Sacrifice Schemes

Childcare vouchers
Cycle to Work
Electric car schemes
Tech schemes
Save both tax and NI

2. Pension Contributions

Every £100 contributed costs £60 (higher rate) or £68 (basic rate) in take-home

3. Tax Code Check

1257L is standard for 2025/26
Wrong code = overpaying tax
Check payslip monthly
Contact HMRC if incorrect

4. Claim Allowable Expenses

Working from home: £6/week tax-free
Professional subscriptions
Uniform cleaning
Mileage (45p/mile first 10k)

5. Marriage Allowance

Transfer £1,260 to spouse (if earning under £12,570)
Saves £252/year
Claim retrospectively 4 years

Frequently Asked Questions

Q: How much tax do I pay on £30,000? A: On £30,000, you pay £3,486 income tax and £1,394 National Insurance, totaling £4,880 (16.3%). Your take-home is £25,120 annually or £2,093 monthly.

Q: Why is my take-home pay less than expected? A: Check your tax code, pension contributions, student loan repayments, and any salary sacrifice schemes. These all reduce your net pay legitimately.

Q: Is National Insurance a tax? A: Technically no – it funds state pension, NHS, and benefits. However, it functions like a tax on earnings above £12,570.

Q: How much is 40k take-home? A: £40,000 gives you £32,320 take-home (£2,693/month) after tax and NI, assuming no other deductions. That's an effective rate of 19.2%.

Q: Can I get a tax refund? A: Yes, if you've overpaid tax due to wrong tax code, job changes, or unused allowances. Check via HMRC's online service or through your payslip.

Q: What's the 60% tax trap? A: Between £100,000-£125,140, you lose your personal allowance at £1 per £2 earned. This creates an effective 60% tax rate on that income band.

Q: How does student loan affect take-home? A: Plan 2 deducts 9% on earnings above £28,470. On £35,000, that's £588/year (£49/month). Plan 1 and postgraduate loans have different thresholds.

Q: Does pension reduce tax? A: Yes! Salary sacrifice pensions reduce both tax and NI. A £100 pension costs only £60-68 in actual take-home, depending on your tax rate.

Related Resources

UK Tax Bands 2025/26 - Detailed tax rate breakdown
National Insurance Guide - NI rates explained
Student Loan Calculator - Calculate repayments
Mortgage Affordability - How much you can borrow

Official Sources:

HMRC: Income Tax Rates
HMRC: National Insurance Rates
Student Loans Company: Repayment Thresholds

Last updated: December 9, 2024
Disclaimer: Calculations are estimates based on standard UK tax rules for 2025/26. Your actual take-home may vary based on personal circumstances, tax code, and additional deductions. UK Calculator is not a financial or tax adviser.