Personal Allowance
PA = max[0, £12,570 − (adjusted income − £100,000) ÷ 2]The standard allowance is reduced by £1 for each £2 of adjusted income above £100,000 and reaches zero at £125,140.
Salary & Take-Home Pay · Methodology
How the calculation works
Estimate annual, monthly and weekly take-home pay for an employee under UK 2026/27 Income Tax, National Insurance and student-loan rules, then measure what happens to additional earnings.
Return to calculatorIncluded
- Salary and an annual bonus
- England, Wales and Northern Ireland tax bands
- Scottish non-savings, non-dividend tax bands
- Personal Allowance tapering above £100,000
- Employee and employer Class 1 National Insurance
- Salary sacrifice, net pay and relief-at-source pension treatments
- Employer pension contributions
- Student Loan Plans 1, 2, 4 and 5
- Postgraduate Loan deductions
- Next-£1,000 and next-£10,000 comparisons
Outside this method
- Individual tax codes and prior-period PAYE adjustments
- Benefits in kind and taxable expenses
- Multiple employments or self-employment
- Marriage Allowance and Blind Person’s Allowance
- Child Benefit charges and childcare eligibility
- Savings, dividends, property or other income
- Pension annual-allowance and tapered-allowance charges
- Exact pay-period payroll rounding
Calculation
Core formulas
Income Tax
Tax = Σ taxable income within each regional band × band rateThe selected England/Wales/Northern Ireland or Scottish 2026/27 bands are applied after the available Personal Allowance.
Employee National Insurance
8% × pay from £12,570 to £50,270 + 2% × pay above £50,270The illustration assumes standard employee National Insurance category A.
Student-loan deduction
9% × max(0, loan pay − plan threshold)A Postgraduate Loan adds a separate 6% deduction above £21,000.
Salary sacrifice
Cash pay = gross pay − sacrificed pension contributionIncome Tax, National Insurance and student-loan earnings are calculated after the sacrificed amount for this current-year illustration.
Marginal deduction
Incremental deduction = result at salary + increment − current resultThe next-£1,000 and next-£10,000 panels recalculate the full position rather than multiplying one headline tax rate.
Timing convention
When cash flows occur
Salary and bonus are treated as annual amounts and smoothed across one complete 2026/27 tax year. The displayed monthly and weekly figures divide the annual estimate by 12 and 52; they do not reproduce a specific payroll calendar.
Limitations
What the result cannot establish
- PAYE tax codes can collect underpayments, benefits and reliefs that are absent from the standard annual calculation.
- National Insurance and student-loan deductions use pay-period thresholds, so a concentrated bonus can produce a different payslip result from annual smoothing.
- Pension contribution definitions vary by scheme; this model applies percentages to salary and excludes the bonus.
- Relief at source assumes the user successfully claims any additional tax relief above the provider’s basic-rate addition.
- Salary sacrifice cannot reduce cash earnings below National Minimum Wage and can affect earnings-related benefits.
- Pension salary-sacrifice National Insurance rules are scheduled to change from April 2029; this calculator applies 2026/27 rules only.
Reference tests
Numerical checks
| Case | Inputs | Expected result |
|---|---|---|
| Standard England salary | £60,000 salary; no pension; no student loan | £11,432 Income Tax, £3,210.60 employee NI and £45,357.40 annual take-home |
| Personal Allowance taper | £110,000 salary; England; no pension or loan | £7,570 Personal Allowance and approximately 60% marginal Income Tax before NI |
| Plan 2 threshold | £30,000 annual pay; Plan 2 | £55.35 annual student-loan deduction before payroll rounding |
| Salary sacrifice | £60,000 salary; 5% sacrifice; no bonus or loan | £57,000 cash salary and approximately £450 employer NI saving |
Evidence