How is take-home pay calculated from a UK salary?
Your take-home pay is your gross salary minus income tax and employee National Insurance (NI). Both are charged in slices, so a pay rise never drops your whole salary into a higher rate: only the part above each threshold is taxed at the higher rate. The figures on this page are for the 2026/27 tax year in England, Wales and Northern Ireland and can change at any Budget.
What are the income tax bands for 2026/27?
| Slice of income | Income tax rate |
|---|---|
| Up to £12,570 (personal allowance) | 0% |
| £12,571 to £50,270 | 20% |
| £50,271 to £125,140 | 40% |
| Above £125,140 | 45% |
The personal allowance shrinks by £1 for every £2 of income above £100,000 and is gone entirely at £125,140. That is why the effective rate between £100,000 and £125,140 is higher than 40%.
How much National Insurance do employees pay?
Employee NI is 8% on earnings between £12,570 and £50,270, and 2% on anything above £50,270. It is separate from income tax and is not affected by the personal allowance taper.
Worked example: a £40,000 salary
- Taxable income: £40,000 minus the £12,570 allowance = £27,430, all in the 20% band.
- Income tax: 20% of £27,430 = £5,486.
- National Insurance: 8% of £27,430 = £2,194.40.
- Take-home: £40,000 minus £7,680.40 = £32,319.60 a year, or about £2,693 a month (an effective rate of about 19.2%).
Assumes a standard tax code, no pension, no student loan and no benefits in kind.
What does this calculator not include?
It ignores pension contributions, student loan repayments, Scottish income tax bands, Marriage Allowance, salary sacrifice and taxable benefits such as a company car. Any of these can change your real pay, and your payslip may differ slightly because of tax codes and pay-period rounding.
How do mortgage lenders treat your salary?
Lenders base affordability on your gross income, not take-home pay, and most multiply it by a set number of times to set a maximum loan. Many lenders will also count regular bonuses, overtime or commission, but usually only part of it and often only after a track record of a year or more. Exactly how much varies by lender. To see what a salary might support, try the mortgage affordability calculator or the loan-to-income calculator.
What should you do next?
Compare your net monthly figure with your outgoings, then see how a possible mortgage payment fits using the mortgage repayment calculator. Lenders also look at your debts and spending, not just your income. This is information, not advice; for your own tax position, check your payslip or speak to an accountant.