How should I calculate my take-home salary?

Enter your monthly take-home pay after tax, National Insurance, and any pension contributions already deducted by your employer. If you're paid weekly, multiply your weekly take-home by 52 and divide by 12. For irregular income, use a conservative monthly average based on the past 3–6 months.

What is a good savings rate?

Financial experts often suggest saving at least 20% of your take-home income, following the popular 50/30/20 rule (50% needs, 30% wants, 20% savings). In practice, even 10–15% is a strong start. Pension contributions count toward your savings rate; the key is consistency over time rather than hitting a specific percentage.

Should I include pension contributions as savings?

Yes. Pension contributions are deferred income that builds wealth for retirement, so they absolutely count as saving. This calculator includes pension contributions in both your savings total and savings rate. Note that some pension contributions are taken from gross pay (before tax), in which case your take-home already reflects this, so enter any remaining pension contributions or additional voluntary contributions.

What should I do if I have a monthly deficit?

First, review your variable expenses (eating out, subscriptions, hobbies, clothing) for easy cuts. Then look at larger fixed costs: switching energy supplier, insurance provider, or broadband deal. Building an emergency fund of 3–6 months' expenses is a priority before aggressively paying down non-urgent debts.

How often should I revisit my budget?

Review monthly to track actuals against your plan, and do a full review when your circumstances change: a pay rise, new fixed contract, or major expense. Many people find that tracking actual spending for just one month reveals surprises that prompt lasting behaviour change.

Monthly Budget Planner

Enter your income and expenses to see your monthly surplus, savings rate, and where your money goes each month.

Your details

Monthly income

Take-home salary

Partner's income

Benefits / tax credits

Other income

Total income£3,000/mo

Housing

£1,455/mo

Rent / mortgage

Council tax

Gas & electricity

Water

Home insurance

Broadband / TV / phone

Transport

£130/mo

Car finance / lease

Car insurance & tax

Fuel & parking

Public transport

Food & drink

£400/mo

Groceries

Eating out / takeaways

Personal

£110/mo

Clothing

Haircuts / grooming

Gym / fitness

Family

£0/mo

Childcare / school

Pets / other

Entertainment

£180/mo

Streaming / subscriptions

Hobbies / activities

Holidays

≈ £100/mo

Savings & debt repayment

£350/mo

Pension contribution

Savings / ISA

Loan repayments

Credit card payments

Your results

£375/month Surplus

Monthly surplus

£375

Savings rate

12%

Good: aim for 20%+

Total income: £3,000/mo
Total outgoings: £2,625/mo
Total savings (incl. pension): £350/mo
Monthly surplus: £375

Breakdown

Housing: £1,455
Transport: £130
Food & drink: £400
Personal: £110
Entertainment: £180
Savings & debt: £350
Total outgoings: £2,625

About this tool

How this budget planner works

Income versus outgoings

The planner adds up every source of household income and every category of spending, then calculates your monthly surplus or deficit. A surplus means you have money left over to save, invest, or pay down debt. A deficit means your spending exceeds your income and something needs to change.

All figures are converted to a monthly basis automatically. Enter annual costs (such as holidays or insurance premiums) in their natural period and the planner divides them by 12 so they don't distort your monthly picture.

The 50/30/20 rule as a benchmark

A widely used rule of thumb splits after-tax income into three buckets: 50% on needs (housing, food, utilities, transport), 30% on wants (eating out, hobbies, subscriptions), and 20% on savings and debt repayment. It is a guide, not a law, and UK housing costs often push the "needs" category higher than 50% in cities.

Use the spending breakdown chart to see how your split compares. If housing alone is over 40% of take-home pay, that is typically a signal to look at reducing other variable costs or increasing income rather than cutting essentials.

What to do with a surplus

Financial planners generally recommend this priority order for surplus income:

1 Build a 3-month emergency fund in an easy-access savings account
2 Pay off high-interest debt (credit cards, personal loans)
3 Maximise pension contributions, especially if your employer matches
4 Use your ISA allowance (up to £20,000/year, tax-free growth)
5 Overpay your mortgage or invest any remaining surplus

Common budgeting mistakes

Forgetting irregular costs. Car servicing, annual insurance renewals, and birthday gifts don't appear every month but they are real. Include them as annual figures and divide by 12.
Using gross rather than net income. Budget against your take-home pay, not your salary. Tax, National Insurance, and pension contributions come out before you see the money.
Treating a budget as a one-off exercise. Costs change. Revisit your budget every 3–6 months and after any major life change such as a pay rise, moving home, or a new child.

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Frequently asked questions

Sources & methodology

Built and maintained by UK Money Tools, a personal finance resource (not a financial adviser). Last reviewed April 2026. Rates and thresholds come from official UK government publications.

GOV.UK · UK government legislation and guidance
HMRC · Tax rates, thresholds and official guidance

Figures are estimates only. This is not financial or tax advice. For help with your specific situation, speak to HMRC or a qualified adviser.