Annual Take-Home Pay
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Payslip Deductions Explainer
Enter your salary details and we'll break down every deduction on your payslip — what each one is, why it's being taken, and whether the amounts look right. Uses the current 2026–27 rates.
📅 2026–27 rates — valid from 6 April 2026
Personal allowance: £12,570
Basic rate NI: 8%
See all statutory rates →
Please fill in all required fields.
£
Your salary before any deductions
How often you receive your payslip
Found on your payslip — leave blank to use standard 1257L
Your employee contribution — leave blank to use minimum 5%
Plan 1 = pre-2012 England/Wales & all NI; Plan 2 = 2012–2023 England/Wales; Plan 4 = Scotland; Plan 5 = England from Aug 2023; Postgrad = masters/doctoral
PAIRED GUIDE
Understanding Your Payslip
What every line on a UK payslip actually means — tax codes, National Insurance, pension deductions, student loan and your net pay explained in plain English.
Read the Guide →How to Use This Tool
- Gross annual salary — your salary before any deductions. If you're paid hourly, multiply your hourly rate by your expected annual hours.
- Pay frequency — how often you're paid. Monthly is most common for salaried employees.
- Tax code — shown on your payslip or P60. Leave blank and we'll use the standard 1257L code (personal allowance £12,570). A different code means your employer has been instructed to collect more or less tax — see the guide for what common codes mean.
- Pension contribution — your employee contribution as a percentage of salary. The statutory minimum is 5% of qualifying earnings. Leave blank and we'll use 5%.
- Student loan — select your repayment plan. If you're unsure, your P60 or payslip will show which plan is being deducted, or check with the Student Loans Company.
All calculations use 2026–27 statutory rates. The tool covers standard PAYE employment — it does not cover Scottish income tax bands, salary sacrifice arrangements, or non-standard tax codes (K codes, BR, NT etc.) beyond interpreting the numeric allowance in standard L/M/N codes.
2026–27 Deduction Rates at a Glance
| Deduction | Rate | Threshold |
|---|---|---|
| Income Tax — basic rate | 20% | £12,571 – £50,270 |
| Income Tax — higher rate | 40% | £50,271 – £125,140 |
| Income Tax — additional rate | 45% | Above £125,140 |
| NI — main rate | 8% | £12,570 – £50,270 |
| NI — upper rate | 2% | Above £50,270 |
| Auto-enrolment pension (employee min) | 5% | Qualifying earnings £6,240 – £50,270 |
| Student Loan Plans 1, 2, 4, 5 | 9% | Above plan threshold |
| Postgraduate Loan | 6% | Above £21,000 |
Frequently Asked Questions
Why is my take-home pay lower than I expected?
The main deductions are Income Tax, National Insurance, and pension contributions. For a basic-rate taxpayer earning £30,000 with the standard 5% pension contribution, these three deductions alone reduce take-home pay by around £6,000 per year. Student loan repayments reduce it further if applicable. The explainer above shows exactly how each deduction is calculated for your salary.
What does my tax code mean?
The most common code is 1257L — the number 1257 represents your personal allowance of £12,570, and the L suffix means you receive the standard allowance. Codes starting with K mean you have underpaid tax being collected, and codes like BR or D0 mean all your pay from that source is taxed at the basic or higher rate (often used for second jobs). Your tax code is set by HMRC and your employer must use it.
Is my pension contribution taken before or after tax?
It depends on how your employer's scheme operates. Net pay arrangement schemes deduct pension contributions from your gross salary before PAYE tax is calculated, giving you tax relief automatically. Relief at source schemes deduct from net pay but the pension provider claims 1% basic rate relief from HMRC. Most workplace pensions operated through the large providers (NEST, Aviva, Legal & General, etc.) use relief at source. The effect is the same for basic-rate taxpayers — higher-rate taxpayers need to claim additional relief through self-assessment.
Why is my National Insurance different each month?
NI is calculated independently each pay period based on that period's earnings alone — unlike Income Tax, which is calculated cumulatively across the tax year. If your pay varies month to month (e.g. because of bonuses or variable hours), your NI deduction will change accordingly. A month where you earn a large bonus can result in a disproportionately high NI deduction.
Can my employer deduct anything else from my pay?
Employers can only make deductions that are authorised by statute (such as tax and NI), required by your contract of employment, or to which you have given written consent. Unlawful deductions from wages — such as docking pay without agreement — can be challenged as an unlawful deduction at employment tribunal within 3 months of the deduction.