How we calculate UK take-home pay

Defaults

• Tax year 2026/27 (6 April 2026 – 5 April 2027); a steady salary for the whole year from one job.
• England, Wales or Northern Ireland rates unless Scotland is chosen; tax code 1257L; National Insurance category A; paid monthly.
• No student loan, no pension, no benefits in kind, unless you add them.

Order of the calculation

1. Pension. Salary sacrifice is taken off pay first, so it lowers income tax, National Insurance and student loan repayments. A net-pay pension is taken off before income tax only. A relief-at-source contribution is paid from take-home pay at 80% of the gross amount (the provider claims 20% basic-rate relief from HMRC).
2. Tax-free pay. The personal allowance (£12,570) is reduced by £1 for every £2 of adjusted net income above £100,000 (plus Blind Person's Allowance if chosen). As in payroll, it is turned into a tax code and the code gives tax-free pay of code × £10 + £9: £12,579 a year for 1257L. If you enter a tax code, we use it instead.
3. Income tax. Taxable pay is rounded down to the pound and taxed through the rUK or Scottish bands. This is the full-year figure; for a steady salary it is what cumulative PAYE collects, and the monthly figure is one twelfth of it. Codes BR, D0, D1 (and Scottish SBR, SD0–SD3) tax all pay at one rate; NT means no tax; K codes add to taxable pay.
4. National Insurance. Worked out per pay period (not cumulatively), on pay after any salary sacrifice, against the published weekly or monthly thresholds (8% between the primary threshold and the upper earnings limit, 2% above). Rounded to the nearest penny, with exactly half a penny rounded down. None over State Pension age.
5. Student loans. Per pay period, on the same pay as National Insurance: the plan rate on pay above the period threshold, rounded down to the whole pound. One undergraduate plan plus, optionally, a Postgraduate Loan, as payroll does.
6. Marriage Allowance (if you receive it): a reduction of 20% of £1,260, only if you are not a higher-rate taxpayer.

Known limits

• Your payslip can differ: new jobs part-way through the year, bonuses, benefits in kind, emergency codes (W1/M1 are treated as cumulative here) and the 50% overriding limit on K codes are not modelled.
• Higher-rate relief on relief-at-source pensions and Gift Aid is claimed separately and is not included.
• High Income Child Benefit Charge, savings and dividend tax are out of scope.

Every release is tested against cases from the official calculator: see accuracy tests. Rate changes are logged in the changelog.