Guide
How is your take-home pay worked out?
Your gross salary is reduced by a few things before it reaches your account: income tax, National Insurance, often a pension, and a student loan if you have one. Here's what each takes, on 2026/27 rates for England, Wales and Northern Ireland.
Income tax
You don't pay tax on all your income. The first slice (your personal allowance, £12,570 for most people) is tax-free. Above that, in England, Wales and Northern Ireland, you pay:
- 20% (basic rate) on income up to £50,270
- 40% (higher rate) on income between £50,270 and £125,140
- 45% (additional rate) above £125,140
If you earn over £100,000, the personal allowance is gradually withdrawn, which creates an effective 60% tax band between £100,000 and £125,140. Scotland sets its own income tax bands and rates, so the figures there are different.
National Insurance
National Insurance is a separate deduction. You pay 8% of earnings between £12,570 and £50,270, then 2% on anything above £50,270. Unlike income tax, it's worked out on each pay period rather than across the whole year, and you stop paying it once you reach State Pension age.
Pension
A workplace pension usually comes off through salary sacrifice, which means it's taken before tax and National Insurance. That lowers the tax and NI you pay, so the real cost of contributing is less than the amount that goes into your pension. A personal pension on "relief at source" works differently: it comes out of your take-home and the tax relief is added back into the pension.
Student loan
If you're repaying a student loan, it takes a percentage of what you earn above its threshold, generally 9% for most plans (6% for a postgraduate loan). Each plan has a different threshold, and you only pay on earnings above it.
Putting it together
On a £35,000 salary with no pension or student loan, you'd take home roughly £2,393 a month after tax and National Insurance. Add a pension and the take-home falls, but so does the tax, and you're building a pension pot at the same time. A pay rise is always worth taking, but it's useful to know which band the extra falls into, especially around the £50,270 and £100,000 thresholds.
These are 2026/27 rates for a standard tax code. Your payslip can differ slightly with benefits in kind, a non-standard tax code, or pay that changes through the year.
See your real monthly figure
Our free take-home pay calculator works out your monthly and yearly pay after tax, National Insurance, pension and student loan, for England, Wales, NI and Scotland. Private to your device.