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UK Take-Home Pay Calculator

Work out your 2026-27 take-home pay after income tax, National Insurance and pension contributions, with the personal allowance taper applied above £100,000.

How to use this calculator

  1. 1Enter your gross annual salary before any deductions.
  2. 2Add your own pension contribution as a percentage — auto-enrolment requires at least 5% from you.
  3. 3Tick salary sacrifice if your employer runs the pension that way, since it saves National Insurance as well as income tax.
  4. 4Check the band table to see exactly which rates your income actually reached.

How the calculation works

Taxable income = salary − pension − allowance (tapered above £100,000). Tax = 20/40/45% bands. NI = 8% between £12,570 and £50,270, then 2%
personal allowance
£12,570, withdrawn by £1 for every £2 of income above £100,000
NI bands
National Insurance runs on its own thresholds, unaffected by the personal allowance

Income tax and National Insurance are separate charges on different bases. NI has no personal allowance — it starts at £12,570 by coincidence of design, not because it shares the allowance — and it does not rise to 40% at the higher-rate threshold; it falls to 2%.

That fall to 2% is why the marginal rate on earnings just above £50,270 is 42%, not 48%, and why the jump from basic to higher rate is smaller than people expect.

The personal allowance taper creates a 60% effective marginal rate between £100,000 and £125,140. Two pounds of extra salary remove one pound of allowance, so that pound becomes taxable at 40% on top of the 40% already charged.

Worked example

£55,000 with a 5% pension

  1. 1.A 5% pension contribution is £2,750, leaving £52,250 of taxable gross pay.
  2. 2.After the £12,570 personal allowance, taxable income is £39,680.
  3. 3.The first £37,700 is taxed at 20% (£7,540) and the remaining £1,980 at 40% (£792).
  4. 4.National Insurance is charged on the full £55,000: 8% on the slice from £12,570 to £50,270, then 2% above.

Result: Just into the higher-rate band

The 60% trap at £110,000

  1. 1.Income of £110,000 is £10,000 above the £100,000 threshold.
  2. 2.The personal allowance is withdrawn by £1 for every £2 over, so £5,000 of the £12,570 allowance is lost.
  3. 3.That £5,000 becomes taxable at 40%, on top of the 40% already due on the £10,000 itself.
  4. 4.The effective marginal rate across this band is therefore 60%, which a pension contribution can avoid entirely.

Result: £5,000 of allowance lost — a 60% marginal rate

Two taxes, not one

A UK payslip carries two separate deductions that people tend to merge into a single idea of "tax", and they behave differently enough that merging them produces wrong answers.

Income tax is charged on income above the personal allowance at 20%, then 40% above £50,270, then 45% above £125,140. National Insurance is charged on earnings at 8% between £12,570 and £50,270 — and then *falls* to 2% above that. It is the only major UK tax that becomes less onerous as you earn more.

The practical consequence is that crossing into the higher-rate band raises your marginal rate from 28% (20% tax + 8% NI) to 42% (40% + 2%), not to 48%. The jump is real but smaller than the headline rates suggest, and NI is the reason.

The 60% band nobody legislated

Between £100,000 and £125,140 the effective marginal rate is 60%, and it appears in no rate table because it is a by-product of the personal allowance taper rather than a rate in its own right.

The mechanism: for every £2 of income above £100,000, £1 of the £12,570 personal allowance is withdrawn. So earning an extra £2 means paying 40% on that £2 *and* 40% on the £1 of income that has just lost its tax-free status — £1.20 of tax on £2 of income, or 60%. Add 2% NI and the true marginal rate is 62%.

This makes pension contributions unusually powerful in that band. Contributing enough to bring income back to £100,000 recovers the whole allowance, so the effective relief on those contributions is 60% rather than the 40% a higher-rate taxpayer normally gets. Once income passes £125,140 the allowance is gone entirely and the marginal rate drops back to 47%.

Why salary sacrifice beats an ordinary pension contribution

Both routes get money into a pension without income tax. The difference is National Insurance.

A conventional contribution comes out of pay that National Insurance has already been charged on, so it saves income tax only. Salary sacrifice reduces your contractual gross pay instead, so the sacrificed amount never counts as earnings for either tax — saving 8% NI on top for a basic-rate earner, or 2% above the upper limit. Many employers also pass on some or all of their own 15% employer NI saving as an extra contribution.

The trade-offs are worth knowing: a lower gross salary can reduce borrowing capacity on a mortgage application, affect income-based benefits, and reduce statutory payments calculated from salary. For most employees the tax saving outweighs these, but not for everyone.

What this assumes, and where it stops

Assumptions

  • England, Wales and Northern Ireland rates for 2026-27. Scottish income tax bands differ.
  • Standard tax code with the full personal allowance, before any taper.
  • Class 1 employee National Insurance, not self-employed Class 2 or 4.
  • No student loan or postgraduate loan repayments are deducted.

Limitations

  • Scottish income tax is not modelled and has more bands with different thresholds.
  • Student loan repayments, which are collected through PAYE and vary by plan, are excluded.
  • Taxable benefits in kind, company cars and non-standard tax codes are not handled.
  • Dividend, savings and rental income follow separate rules — see the dividend tax calculator.

Common questions

Why is my marginal rate 42% and not 48%?

Because National Insurance falls rather than rises at the higher-rate threshold. Below £50,270 you pay 20% income tax plus 8% NI, a 28% marginal rate. Above it you pay 40% income tax but only 2% NI, giving 42%. NI is the only major UK tax that becomes lighter as earnings rise, and it softens the step into the higher-rate band considerably.

What is the 60% tax trap?

Between £100,000 and £125,140 your personal allowance is withdrawn by £1 for every £2 of income above £100,000. So an extra £2 of salary is taxed at 40% and also strips a further £1 of income of its tax-free status, which is then taxed at 40% too — £1.20 of tax on £2, or 60%, and 62% once NI is counted. Pension contributions that bring income back under £100,000 recover the allowance and are unusually valuable here.

Is salary sacrifice better than a normal pension contribution?

Usually yes, because it saves National Insurance as well as income tax. A conventional contribution comes from pay that NI has already been charged on; sacrifice reduces your gross pay before either tax applies. Many employers also pass on part of their 15% employer NI saving. The downsides are a lower stated salary for mortgage applications and potentially lower statutory payments calculated from salary.

Do these figures apply in Scotland?

Not for income tax. Scotland sets its own bands and rates, with more bands than the rest of the UK and different thresholds, so a Scottish taxpayer on the same salary will usually see a different income tax figure. National Insurance is not devolved and is identical across the UK, as are the dividend rates shown on the dividend calculator.

Sources

Formula and content last reviewed on .

Results are estimates for information only, not professional advice.

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