Salary Calculator

How the Salary Calculator works

This calculator converts between annual, monthly, weekly, daily, and hourly pay and shows your estimated take-home after income tax and National Insurance for 2026/27. It uses the standard UK personal allowance of £12,570 and the England/Wales/Northern Ireland income tax bands; Scottish rates are covered by the Income Tax Calculator.

Adding pension and student loan

Open the "Optional deductions" section to include a pension contribution and/or student loan repayment. The pension figure is your employee contribution as a percentage of gross salary, tax relief is added on top of this by your pension provider and does not reduce the deduction shown. For salary sacrifice, which also reduces income tax and NI, use the Salary Sacrifice Calculator. Student loan repayments use 2026/27 thresholds for Plans 1, 2, 4, 5, and the Postgraduate Loan.

Comparing salary offers

A £5,000 salary increase rarely translates to £5,000 extra in your pocket. At a basic rate income (under £50,270), roughly 32p of every additional £1 goes to tax and NI, so a £5,000 raise is worth around £3,400 net. At a higher-rate income the effective marginal rate is around 42%, so the same raise is worth approximately £2,900 take-home. Use this calculator to compare two salary figures side-by-side before accepting any offer.

Hourly and daily rate conversion

The calculator assumes 5 working days per week and 52 weeks per year (260 days) for daily and hourly conversions. Contractors comparing a day rate against a permanent salary should also account for the lack of employer pension contributions, holiday pay, and employer NI savings that come with PAYE employment.

UK income tax and NI rates for 2026/27

The personal allowance remains frozen at £12,570, unchanged since 2021/22 and frozen through 2027/28 under current government policy. As wages rise with inflation, more earners are pulled into higher bands each year even without an explicit rate change. This is known as fiscal drag.

The 60% effective rate between £100,000 and £125,140 arises because every £2 of income above £100,000 withdraws £1 of personal allowance, creating a 40% income tax rate on £1.50 of income for each £1 earned. Scottish rates differ, use the Income Tax Calculator for Scottish results.

What affects your actual take-home pay?

The salary calculator shows a straightforward gross-to-net conversion, but your real payslip may differ for several reasons:

• Tax code, HMRC issues your employer a tax code that determines how much income tax to deduct. The standard code is 1257L (reflecting the £12,570 personal allowance). An incorrect code, common after starting a new job or having multiple income sources, can mean you pay too much or too little tax all year. Use the Tax Code Calculator to check your code.
• Benefits in kind, Company cars, private medical insurance and other non-cash benefits are taxable. Their value is added to your income and tax is collected via an adjusted tax code, reducing your monthly take-home.
• Pension contributions, Whether your contributions are made via salary sacrifice, net pay, or relief at source affects both the gross figure on your payslip and the net amount you receive.
• Bonus and irregular pay, HMRC's PAYE system uses cumulative totals. A large bonus early in the year may be taxed at the wrong rate temporarily, with an adjustment later. The calculator shows the accurate annual figure.

Salary sacrifice vs a pay rise

Sometimes increasing your pension via salary sacrifice is more valuable than a small pay rise. Consider a basic-rate taxpayer earning £40,000 who is offered either a £2,000 pay rise or an equivalent employer pension contribution through salary sacrifice:

• Pay rise of £2,000, After 20% income tax and 8% NI, the net increase in take-home is approximately £1,440.
• £2,000 into pension via salary sacrifice, The full £2,000 goes into the pension untaxed, plus the employer saves 15% NI (£300) which many pass through, meaning £2,300 in the pension at no extra cost to the employer.

For higher-rate taxpayers the comparison is even more stark: a £2,000 pay rise nets roughly £1,160, while £2,000 into a pension avoids 40% income tax and 2% NI on top. Use the Salary Sacrifice Calculator to model the exact numbers at your income level.