Take-Home Pay (PAYE) Calculator

How take-home pay is calculated

Your employer deducts Income Tax and Class 1 employee National Insurance from your gross salary under PAYE before you're paid. This calculator applies the same Personal Allowance, tax bands and NI thresholds HMRC publishes to show what's left.

The Personal Allowance and its taper

The first £12,570 of income is tax-free for most people. If your salary is over £100,000, that allowance shrinks by £1 for every £2 over the threshold, disappearing entirely once income reaches £125,140 — which is why take-home pay can rise more slowly than gross pay in that band.

Income Tax bands

What's left after your Personal Allowance is taxed at 20% up to the basic-rate limit, 40% up to the higher-rate limit, and 45% above that. Each band only taxes the slice of income that falls within it — moving into a higher band doesn't retroactively tax everything below it at the higher rate.

Employee National Insurance

Class 1 employee NI is charged at 8% on earnings between the primary threshold and the upper earnings limit, and 2% above that. It's calculated on gross pay above the lower threshold, not on taxable income after your Personal Allowance, so it starts at a different point than Income Tax does.

What isn't included

This is gross-to-net for a single PAYE salary only. It doesn't account for pension contributions, student loan repayments, benefits in kind, a different tax code (for example if you have unpaid tax from a previous year), or Scottish Income Tax rates, which differ from the rest of the UK. For a payroll calculation that includes those factors, see ac-co's payroll product.

A worked example

On a £40,000 gross salary, £12,570 is tax-free, leaving £27,430 taxable, all within the basic-rate band, so Income Tax is £5,486 (20%). National Insurance is charged at 8% on earnings between the primary threshold and £50,270 — since £40,000 sits below the upper earnings limit, NI is calculated on £40,000 minus the primary threshold, coming to roughly £2,343. Total deductions are around £7,829, leaving take-home pay of about £32,171 a year, or roughly £2,681 a month.

Common mistakes to avoid

The most common misunderstanding is treating the higher-rate threshold as a cliff-edge that taxes your whole salary at 40% once you cross it — only the slice of income above the threshold is taxed at the higher rate, everything below stays at 20% or 0%. Another is forgetting the Personal Allowance taper above £100,000, which quietly increases your effective tax rate on the slice between £100,000 and £125,140 far beyond the headline 40% rate. A third is comparing this figure directly to a payslip without checking your actual tax code, which can differ from the standard allowance assumed here.

Comparing job offers

Because two employers can quote a role at the same gross salary but structure pension contributions, benefits or bonus differently, take-home pay alone doesn't tell the whole story — but it's the right starting point for a like-for-like comparison of the cash element of an offer. Run each offer's gross salary through this calculator, then layer on any pension contribution, benefit-in-kind or bonus structure separately, since those change the picture in ways a single gross-to-net figure can't capture on its own.

Monthly and weekly figures

Salary is usually quoted annually but paid monthly or weekly, and the split isn't always an even division — the Personal Allowance, tax bands and NI thresholds are applied cumulatively across the tax year by PAYE, which can make a single month's pay slightly uneven around a pay rise, bonus, or a change in tax code partway through the year. The annual figure this calculator produces is the reliable one to plan around.