How UK take-home pay is worked out in 2026/27, step by step

Guide · Updated 2026-11-10

From salary to take-home in 2026/27: the personal allowance, tax bands in Scotland and the rest of the UK, National Insurance, student loans and the three ways to pay into a pension.

Open the UK tax Free, in your browser, nothing uploaded.

A UK payslip can take off Income Tax, National Insurance (NI), a student loan repayment and a pension contribution, and each follows its own rules. The UK tax calculator puts them together for the 2026/27 tax year (6 April 2026 to 5 April 2027) and shows the take-home pay a year, a month and a week, for Scotland or for England, Wales and Northern Ireland. It is for employees checking a payslip, graduates wondering what their loan costs, and anyone choosing how much to put into a pension. To see how a pension contribution is topped up, try the pension tax relief calculator; to plan what to do with the rest, use the budget planner or the loan payoff planner.

What it is

Take-home pay is what is left after four separate calculations.

1. Income Tax. Most people pay no tax on the first £12,570, the personal allowance. Above £100,000 of income, the allowance shrinks by £1 for every £2, so it is gone by £125,140. What remains is taxable income, cut into bands:

• England, Wales and Northern Ireland: 20% on the first £37,700, 40% up to £125,140, 45% above.
• Scotland: six bands, from 19% (starter) through 20%, 21%, 42% and 45% to 48%.

2. National Insurance. Employees pay 8% on pay between £12,570 and £50,270 a year and 2% above that. NI is charged on salary only, never on rent or pension income.

3. Student loans. Each plan takes 9% of pay above its threshold: Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000. A postgraduate loan takes 6% above £21,000, on top of any other plan.

4. Pension. Money can go in three ways, and each saves different things:

• Relief at source: you pay 80% of the amount from take-home pay and your provider claims 20% from HMRC. If you pay a higher rate, your bands are stretched by the gross amount.
• Net pay: your employer takes it before tax, so it saves Income Tax but not NI.
• Salary sacrifice: your contract pay is lowered, so it saves tax, NI and student loan repayments.

How to use it

1. Choose where you live: Scotland, or England, Wales or Northern Ireland.
2. Type your yearly salary before anything comes off, and any other taxable income, such as rental profit or a pension you already draw.
3. Pick how you pay into a pension, or leave it at “No pension”.
4. Set into your pot as a percentage of salary or pounds a year. With relief at source, this is the gross amount including the 20% top-up.
5. Tick each student loan you repay.
6. Read the take-home boxes, the marginal and average rates, and the note under them, which explains a reduced allowance or how your pension is paid. The bar and table split every pound into tax, NI, loans, pension and take-home.

A worked example

Isla lives in Glasgow and earns £35,000. First, with no pension or loan:

• Taxable income = £35,000 − £12,570 = £22,430.
• Tax = 19% × £3,967 + 20% × £12,989 + 21% × £5,474 = £753.73 + £2,597.80 + £1,149.54 = £4,501.07.
• NI = 8% × (£35,000 − £12,570) = £1,794.40.
• Take-home = £35,000 − £4,501.07 − £1,794.40 = £28,704.53 a year.

Now add a Plan 2 loan and a 5% pension paid by relief at source.

• Into the pot: 5% × £35,000 = £1,750. She pays 80%, which is £1,400, and her provider adds £350.
• Her bands from 20% upwards are stretched by £1,750, so £1,750 moves from the 21% band into the 20% band. Tax falls by 1% × £1,750 = £17.50, to £4,483.57.
• Plan 2 = 9% × (£35,000 − £29,385) = 9% × £5,615 = £505.35.
• NI is unchanged at £1,794.40.
• Take-home = £35,000 − £4,483.57 − £1,794.40 − £505.35 − £1,400 = £26,816.68 a year, about £2,235 a month.

Her take-home falls by £1,887.85, yet £1,750 has gone into her pension. Her marginal rate is now 38%: 21% tax, 8% NI and 9% loan on each extra pound.

Where it is used

• Checking a new job offer, including the difference between living in Scotland and elsewhere.
• Choosing a pension method or amount, by switching between relief at source, net pay and salary sacrifice.
• Graduates working out what their student loan really takes, and how it stacks with a postgraduate loan.
• Earners near £100,000, who can see the very high marginal rate that the allowance taper creates between £100,000 and £125,140, and how pension contributions bring the allowance back.
• Landlords with a day job, who can add rental profit as other income and see the extra tax.
• Money lessons, to show how bands, NI and loans combine into one marginal rate.

Common mistakes

• Entering take-home pay instead of salary. Type the figure before anything is taken off, from your contract or payslip.
• Choosing Scotland because you work there. Scottish rates depend on where you live, not where your employer is.
• Typing the net amount for relief at source. The tool expects what goes into the pot, including the 20% top-up.
• Adding savings interest or dividends. They have their own allowances and rates, which the tool leaves out.
• Expecting an exact match to your payslip. Payroll works month by month with your tax code. If yours is not 1257L, the result will differ. Check the official source.

Questions people ask

Why does my student loan seem small? Only the pay above your plan’s threshold is charged, so on £35,000 a Plan 2 loan takes 9% of £5,615, not 9% of £35,000.

What does the marginal rate include? Tax, NI and student loan repayments on your next £100 of salary. Pension payments are not counted.

Can two undergraduate plans both be charged? No. With more than one, the tool takes 9% once, from the lowest threshold. A postgraduate loan is added on top.

Is this advice? No. It is general education based on the 2026/27 rates the tool uses. Rates change each April; check the official source on GOV.UK or ask HMRC.