Gross to net in three steps
Turning a headline salary into the money you actually receive follows the same order every month under PAYE:
- Subtract the personal allowance — the slice of income that is tax-free.
- Apply the income tax bands to whatever is left.
- Add employee National Insurance, which is charged on a slightly different set of thresholds.
Pension contributions and student loan repayments come off too if they apply to you, but the two universal deductions are income tax and National Insurance.
The personal allowance
For 2026/27 the standard personal allowance is £12,570. You pay no income tax on earnings up to that figure. The allowance is frozen, and it tapers away once you earn a lot: for every £2 of income above £100,000 you lose £1 of allowance, so it reaches zero at £125,140. That taper is why the band between £100,000 and £125,140 carries an effective marginal rate of around 60%.
Income tax bands 2026/27
For England, Wales and Northern Ireland, income above the personal allowance is taxed in slices:
| 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% |
Scotland sets its own income tax bands and rates, so Scottish taxpayers should use a Scotland-specific calculation instead.
Employee National Insurance 2026/27
Class 1 National Insurance for employees uses its own thresholds, and the rate was cut to 8% in January 2025:
| Earnings band | Rate |
|---|---|
| Up to £12,570 (£242/week) | 0% |
| £12,570 – £50,270 (£242–£967/week) | 8% |
| Over £50,270 (above £967/week) | 2% |
A worked example: £35,000 salary
To check the maths against your own number, the calculator above applies these exact 2026/27 bands. For a figure that also models pension salary sacrifice, student loans and different tax codes, run it through the UK income tax calculator on ukcalculator.com, which itemises every band as it goes.
What else can reduce your pay
- Workplace pension: auto-enrolment typically takes 5% of qualifying earnings, often before tax.
- Student loan: 9% above the relevant plan threshold (6% for postgraduate loans).
- Tax code adjustments: a non-standard code (benefits in kind, underpaid tax) changes your tax-free amount.
If you want to compare two job offers or a pay rise, it helps to look at the National Insurance impact separately — a dedicated National Insurance calculator shows how much of each extra pound goes to NI at the 8% and 2% rates.