💷 UK Take-Home Pay Calculator
Your salary after HMRC takes its share.
Annual take-home pay
Estimates for planning only, not financial advice.
On a £40,000 salary with no pension contributions: income tax £5,486, National Insurance £2,194, take-home £32,320 a year, £2,693 a month. The effective deduction rate is 19.2 percent, but the marginal rate on the next pound earned is 28 percent. That gap between average and marginal is where pay-rise disappointment lives.
How to Use This Calculator
Enter your gross annual salary and pension contribution percentage. The calculator applies 2025/26 income tax bands, National Insurance, and the personal allowance taper above £100,000.
Enter gross salary before any deductions. Use P60 or contract figure.
Enter pension contribution as a percent. Salary-sacrifice pensions also save NI, which this calculator does not model.
Read monthly and weekly take-home for budgeting, and the marginal rate before negotiating a raise.
2025/26 Tax Bands and NI
| Band | Taxable income | Rate |
|---|---|---|
| Personal allowance | £0 - £12,570 | 0% |
| Basic rate | £12,571 - £50,270 | 20% |
| Higher rate | £50,271 - £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
| NI main rate | £12,570 - £50,270 | 8% |
| NI upper rate | Over £50,270 | 2% |
Thresholds are frozen until 2028, which means fiscal drag: inflation pushes more of each pay rise into higher bands. The personal allowance tapers by £1 for every £2 over £100,000, creating a notorious 60 percent effective marginal rate between £100,000 and £125,140.
Worked Example
£40,000 salary, no pension. Taxable after allowance: 40,000 - 12,570 = £27,430, all in the basic band: 27,430 x 0.20 = £5,486. NI: (40,000 - 12,570) = £27,430 x 0.08 = £2,194.40. Take-home: 40,000 - 5,486 - 2,194.40 = £32,319.60, shown as £32,320. Monthly: £2,693.33. With a 5 percent pension (£2,000), taxable pay falls to £38,000 and take-home becomes £30,954 plus £2,000 in the pension pot.
The £100k Trap
Between £100,000 and £125,140, the allowance taper stacks on the 40 percent band: each extra £1 loses 50p of allowance taxed at 40 percent, an effective 60 percent marginal rate, plus 2 percent NI. Pension contributions that pull taxable pay back under £100,000 are spectacularly valuable here: a £5,000 contribution can be worth £3,000 in avoided tax. Anyone in this band should model salary-sacrifice pensions before anything else.
Beyond Income Tax
Take-home is not spending power: council tax, student loan repayments (Plan 2: 9 percent over £28,470), and frozen thresholds all bite. And this calculator covers England, Wales, and Northern Ireland; Scotland has different bands (19-48 percent across six bands). For the US equivalent picture, see our weekly pay calculator, and to value the hours behind the pay, the unpaid work calculator.
Salary Sacrifice: the Full Picture
Salary sacrifice is the UK's best legal tax hack, and pensions are only the start. Sacrificing salary for pension contributions saves both income tax and National Insurance (unlike relief-at-source pensions, which save only income tax): on £40,000, a 5 percent sacrifice saves about £560 in tax and NI combined versus the relief-at-source route. The same mechanism powers cycle-to-work schemes (save up to 42 percent on a bike), electric car schemes (huge for higher-rate taxpayers), and childcare vouchers' successors.
Three caveats. First, sacrifice lowers your official salary, which can reduce mortgage affordability calculations, statutory maternity pay, and death-in-service multiples: check each before sacrificing deeply. Second, it cannot take cash pay below the National Minimum Wage. Third, the £100,000 allowance taper makes sacrifice spectacularly valuable in the £100k-£125k band, where each sacrificed pound can be worth 60 percent in avoided tax plus 2 percent NI. In that band, sacrifice first and ask questions later.
Take-Home Tactics Worth Knowing
Small choices compound in the UK system. If your income sits just above £100,000, a pension contribution that pulls you back under restores the full personal allowance: each £2 sacrificed can return £1.20 of allowance, an effective relief rate near 60 percent. If you are married and one partner earns under £12,570, the marriage allowance transfers £1,260 of allowance for up to £252 a year; it can be backdated four years, so check now even if you never have.
Timing matters too. Bonuses paid in a month with no other pay can attract emergency tax; it self-corrects, but a quick call to HMRC speeds the refund. Child benefit's high-income charge claws back benefit between £60,000 and £80,000, so a salary-sacrifice contribution that drops adjusted net income below £60,000 can restore thousands in child benefit on top of the tax saving. Run the calculator with and without the sacrifice: the true marginal rate, with all clawbacks, is often far above the headline band.
Keep More of What You Earn
Take-home pay is not just salary minus tax; it is a system you can optimize. Salary sacrifice, pension timing, marriage allowance, and child-benefit thresholds each move the needle, and in the £100k-£125k band they move it dramatically. Run your numbers through the calculator, check your tax code yearly, and revisit the setup every April: the thresholds freeze, your pay does not, and the gap is where planning pays.
Estimates for planning only, not financial advice.
Frequently Asked Questions
How much tax will I pay on £40,000 in the UK?
For 2025/26: £5,486 income tax plus £2,194 National Insurance, leaving £32,320 take-home (£2,693/month) with no pension contributions. The effective deduction rate is 19.2%, but the marginal rate is 28%. That gap is why a £1,000 pay rise nets you only about £720: always judge raises by the marginal rate, not the average.
What are the UK tax bands for 2025/26?
Personal allowance £12,570 (0%), basic rate 20% to £50,270, higher rate 40% to £125,140, additional rate 45% above. National Insurance: 8% from £12,570 to £50,270, 2% above. Thresholds are frozen until 2028. The freeze is a stealth tax rise: every inflation-linked pay increase pushes a little more of your salary into higher bands.
What is the 60% tax trap?
Between £100,000 and £125,140, the personal allowance tapers £1 per £2 of income, stacking with the 40% band for a 60% effective marginal rate (+2% NI). Pension contributions pulling income below £100k are extremely valuable here. A £5,000 salary-sacrifice pension contribution in this band can be worth £3,100 in avoided tax and NI: nowhere else does a pension contribution work this hard.
How does salary sacrifice affect take-home?
Salary-sacrifice pensions reduce salary before tax and NI, saving both (unlike relief-at-source pensions, which save only income tax). A 5% sacrifice on £40k saves £400 income tax plus £160 NI versus the relief-at-source route. Ask your employer which method they use; many still default to relief-at-source, leaving the NI saving unclaimed.
Do I pay National Insurance on pension income?
No. NI applies to earned income only, not pensions, rental income, or savings. That is one reason working past state pension age still incurs NI on wages but pensioners drawing pensions pay none. Note the state pension age twist: employees over state pension age stop paying NI on wages too, a small bonus for working longer.
What about student loan repayments?
Plan 2 graduates pay 9% of earnings over £28,470; postgraduates pay 6% over £21,000. These come off take-home like a tax but are not included in this calculator; a £40k Plan 2 graduate pays about £1,038 a year extra. With both a Plan 2 and postgraduate loan, the combined 15% above thresholds acts like an extra income tax band on graduates.
Are Scottish tax bands different?
Yes. Scotland sets its own bands: 19% starter, 20% basic, 21% intermediate, 42% higher, 45% advanced, 48% top rate, with different thresholds. This calculator uses England/Wales/NI bands; Scots pay slightly more at most incomes. The differences are modest for basic-rate taxpayers but widen higher up: a £60,000 earner pays roughly £1,500 more in Scotland.
What is fiscal drag?
Frozen tax thresholds plus rising wages: inflation pushes more income into higher bands without any real-terms pay rise. With thresholds frozen to 2028, millions drift into the 40% band each year on static real pay. Fiscal drag is why the Treasury's income tax receipts keep hitting records while voters feel no better off: the tax rises without a vote.
How is take-home pay actually paid?
Employers deduct tax and NI through PAYE each payday and send them to HMRC; you receive the net amount. Your tax code (usually 1257L) encodes your allowance; check it yearly, because wrong codes are common. An emergency tax code on a new job can over-deduct hundreds; it corrects automatically, but checking your first payslip is always worthwhile.
Does the personal allowance apply to everyone?
Most UK residents get the full £12,570, reduced by £1 per £2 over £100,000 to zero at £125,140. Non-residents and some high earners with complex affairs may differ; marriage allowance can transfer 10% to a spouse. The transfer is worth up to £252 a year and is claimable for the last four tax years, so backdate it if you missed out.