How We Calculate Your Take-Home Pay
This page explains our methodology in full. All calculations are based on official HMRC rates for the 2026/27 tax year (6 April 2026 to 5 April 2027).
Data Sources
All tax rates, thresholds, and allowances are sourced directly from:
- HMRC: Rates and thresholds for employers 2026 to 2027 (published 30 January 2026, last updated 5 June 2026)
- GOV.UK: Income Tax rates and Personal Allowances
- House of Commons Library: Direct taxes — Rates and allowances for 2026/27
Rates last verified: 5 August 2026
Step 1: Personal Allowance
The standard Personal Allowance for 2026/27 is £12,570. You pay no Income Tax on income up to this amount.
If your income exceeds £100,000, the Personal Allowance reduces by £1 for every £2 over £100,000. This means it reaches £0 at £125,140, creating an effective 60% marginal tax rate in this band.
Step 2: Income Tax
After deducting the Personal Allowance, we apply Income Tax at the following rates:
England, Wales & Northern Ireland
| Band | Rate | Taxable income |
|---|---|---|
| Basic Rate | 20% | Up to £37,700 |
| Higher Rate | 40% | £37,701 to £125,140 |
| Additional Rate | 45% | Above £125,140 |
Scotland
| Band | Rate | Taxable income |
|---|---|---|
| Starter Rate | 19% | Up to £3,967 |
| Basic Rate | 20% | £3,968 to £16,956 |
| Intermediate Rate | 21% | £16,957 to £31,092 |
| Higher Rate | 42% | £31,093 to £62,430 |
| Advanced Rate | 45% | £62,431 to £125,140 |
| Top Rate | 48% | Above £125,140 |
Step 3: National Insurance (Employee)
Class 1 Employee National Insurance for 2026/27:
- 8% on earnings between £12,570 (primary threshold) and £50,270 (upper earnings limit)
- 2% on earnings above £50,270
Step 4: Student Loan Repayments
Repayments are calculated as a percentage of income above the threshold:
| Plan | Threshold | Rate |
|---|---|---|
| Plan 1 | £26,900/year | 9% |
| Plan 2 | £29,385/year | 9% |
| Plan 4 (Scotland) | £33,795/year | 9% |
| Plan 5 | £25,000/year | 9% |
| Postgraduate Loan | £21,000/year | 6% |
Multiple student loans can apply simultaneously. Each is calculated independently on income above its own threshold.
Step 5: Pension Contributions
For auto-enrolment pensions, contributions are calculated on "qualifying earnings" only — the portion of salary between £6,240 and £50,270. The minimum employee contribution is 5%.
For salary sacrifice pensions, the contribution is deducted before tax and NI calculations, reducing both your Income Tax and National Insurance.
Limitations
This calculator provides estimates. It does NOT account for:
- Individual tax codes (assumes standard 1257L)
- Benefits in kind (company car, private healthcare)
- Marriage allowance transfers
- Savings or dividend income
- Self-employment income
- Multiple employment sources
- Tax code adjustments for underpaid/overpaid tax from previous years
For a precise calculation based on your personal circumstances, consult a qualified accountant or use HMRC's official tax checker.
How We Stay Accurate
- Tax rates are stored in a single configuration file, updated within 1 week of each UK Budget
- All rates are cross-referenced with official gov.uk publications
- We display the "Rates last verified" date on the calculator page
- We link directly to the HMRC source documents so you can verify independently
Important: This tool is for illustrative purposes only and does not constitute financial or tax advice. Consult a qualified professional for advice specific to your circumstances.