Your Results

Net Income

Net income is your total taxable income before any Personal Allowances, less any qualifying pension contributions. Your personal allowance is reduced by £1 for every £2 that your net income is above £100,000. Your allowance is zero if your income is £125,140 or above. If your net income exceeds £150,000, you will likely need to submit a Self-Assessment tax return.

Take Home

Take home is the amount you receive into your personal bank account after deducting all taxes, accrued holiday pay and student loan contributions.

Total Capital

Total capital consists of your take home pay, plus any pension contributions and accrued holiday pay. It is designed to give a more accurate representation of the overall financial gain from a contract and can be compared against the same figure in our Outside IR35 Calculator.

Annualised Earnings

An annualised calculation estimates how much you will earn for a full year based on a defined working time variable: hours, days or weeks. As a frame of reference, a standard year has 260 working days, with most contractors aiming to work between 220 and 230 days.

Specific Dates

If you know a contract's start and end date, you can enter it here to calculate how much you will earn over a specific period. Bank holidays are automatically excluded from the number of working days. The specific dates functionality only works if the timing input is set to ‘Per Day’.

Tax Year

By default, the current tax year is applied, but if you wish to see calculations for other years, you can select them from the drop-down menu. Where tax rates change during the year, a blended rate is applied.

Tax Code

1257L is the standard tax code used by most people. If you are unsure of your tax code but think you will earn over £100k, leave the settings on Standard. The tapered personal allowance will be considered automatically.

Scotland

If you live in Scotland, you pay a different rate of income tax. You'll pay the same rate as the rest of the UK on dividends.

Non-Standard Tax Code

HMRC may provide a non-standard tax code if your situation calls for it. The letter refers to your specific situation and is used to adjust your personal allowance. Most codes also contain a number, which usually refers to the amount you can earn before any tax is due, divided by 10.

National Insurance

The NI category letter determines what contributions employers and employees need to make when running payroll. Most individuals have a NI category letter of A.

Other Income

Other income accounts for any other income received during the year that would usually be included on a Self-Assessment tax return. For income, this may be from a second job, property investment or a side hustle. Dividends would usually come from any qualifying investments held.

Other Dividends

Other dividends accounts for any other dividends received during the year that would usually be included on a Self-Assessment tax return. This would usually come from any qualifying investments held.

Student loan

Student loans are repaid using different methods depending on when you started the course for which you took the loan and where you lived.

Salary Sacrifice

Some umbrella companies facilitate salary sacrifice arrangements, where a contractor agrees to reduce their pay, with the difference paid into their SIPP. The reduction in pay means lower income tax and National Insurance (both Employer's and Employee's contributions).

These tax breaks make salary sacrifice the most popular choice for contractors who want to save for their future in a tax-efficient way.

Salary Sacrifice

As a contractor, you can make pension contributions from your personal funds or your company’s pre-tax income. Most limited company contractors will make their pension contributions through their company as it is more tax-efficient than contributing your funds as an individual. Pension contributions made directly from your company’s income are invested before tax, which means you will save the amount you would have paid in both income and corporation tax on the contribution

Unlike personal pension contributions, the amount that can be invested directly from your company income is not linked to the amount you take as a salary.

Salary Sacrifice

A salary sacrifice arrangement is where an employee agrees to reduce their pay, with the difference paid into their SIPP. The reduction in pay means lower income tax and national insurance.

Workplace Pension

Umbrella company contractors are automatically enrolled in a workplace pension scheme. Unlike permanent employees, umbrella workers are responsible for the employee's contribution (minimum 5%) and the employer's contribution (minimum 3%). Once enrolled, you're entitled to opt out or cease active membership.

Workplace Pension

Employees are automatically enrolled in a workplace pension scheme. Once enrolled, you're entitled to opt out or cease active membership.

Allowances

The Blind Person's Allowance is an extra tax-free allowance, meaning you can earn more before paying Income Tax.

The Marriage Allowance lets you receive a fixed amount of your spouse/civil partner's Personal Allowance, thereby reducing your tax bill.

Blind Person's Allowance

The Blind Person's Allowance is an extra tax-free allowance, meaning you can earn more before paying Income Tax.

Marriage Allowance

The Marriage Allowance lets you receive a fixed amount of your spouse/civil partner's Personal Allowance, thereby reducing your tax bill.

Cash Allowances

Cash allowances are extra payments an employer gives you on top of your base salary to cover specific costs or compensate for particular circumstances. They are usually paid as cash, rather than as a benefit or reimbursement, which means you can spend them however you choose. They are treated like normal pay for tax purposes (taxable and subject to National Insurance, unless specifically exempt).

Umbrella Margin

The umbrella company margin is the amount the umbrella company charges on each payment you receive. It's an administration fee, covering the cost of running your payroll and the other operational costs of running a business.

Holiday Pay

There are two main methods by which you can receive your holiday pay as an umbrella company contractor:

  • Advanced Payment: The umbrella company adds your holiday pay to your regular payslip. This option is the most preferred solution among umbrella company contractors
  • Accrual Method: The umbrella company sets aside your holiday pay until you decide to take annual leave or when you leave the company.

Apprenticeship Levy

The UK Government initiated the Apprenticeship Levy in April 2017 for all employers paying a wage bill of more than £3 million per year. Umbrella Companies that meet this criterion are required to pay 0.5% of their payroll each month as a levy tax, a charge they pass onto contractors

Director’s Salary

You have three options:

1. Simplified

At £9,100, your salary is at the Secondary Threshold and below the Primary Threshold, so there is no employer’s or employee’s National Insurance (‘NI’) due. It is higher than the Lower Earnings Limit, so you will continue to earn NI credits. Although £9,100 is more straightforward regarding administration, you are roughly £180 worse off than the salary of £12,570 due to less of an offset against your corporation tax bill. This option is usually only chosen by contractors without an accountant, wanting to avoid the burden of making NI payments.

2. Tax Efficient

Most contractors choose £12,570, as this is the most tax-efficient option whereby you maximise your personal allowance. Although you must make NI contributions, this is offset by the additional corporation tax savings. £12,570 is the best salary for a company with multiple employees as your company becomes eligible for the employment allowance.

3. Other

The optimum salaries mentioned above are only advisable if the director has their total personal allowance. When the director has other income (such as a second job or from rental properties), it may be advisable to pay a different salary.

Employment Allowance

Employment allowance allows eligible employers to reduce their Employer’s National Insurance liability by up to £5,000. There are multiple criteria for eligibility, although the relevant one here is that a company is not eligible for the employment allowance if there is only one employee in the company and that employee is also a director.

What this means in practice is that if you are a limited company contractor and you employ your spouse, you can both take salaries of £12,570 and use the employment allowance to reduce the Employer’s National Insurance liability to zero.

Other Salary Taken

The optimum salaries mentioned above are only advisable if the director has their total personal allowance. When the director has other income (such as a second job or from rental properties), it may be advisable to pay a different salary.

Second Employee

It is common for contractors to employ a spouse (or other family members) in their business as a second employee. It not only provides the opportunity to maximise tax efficiencies by paying them a salary and utilising their income thresholds, but also helps ease the administrative burden of running a Limited Company.

Retained Earnings

Owners of limited companies can plan a tax-efficient distribution of dividends by leaving surplus profit in the business and withdrawing it in a later tax year. The profit left within the company is known as ‘retained earnings’. Although corporation tax is still owed, no dividend tax is due until the money is paid to shareholders.

Business Asset Disposal Relief

Business Asset Disposal Relief (‘BADR’) is a form of tax relief that reduces the rate of capital gains tax paid to 10%, and most contractors can claim the relief when they decide to close their personal limited company. Retained earnings are a qualifying asset, meaning they are eligible for the reduced tax rate.

Joint Ownership

Joint Ownership Dividends are distributed according to the percentage of company shares owned by each shareholder, i.e. if a contractor and their partner each own half the company’s shares, they will each receive 50% of every dividend distribution.

Recurring Expenses

Limited company expenses are allowable expenses that your business can claim, they are subtracted from your revenue, reducing the amount of corporation tax you pay. You can only claim for the expenses you incur 'wholly and exclusively' during the everyday running of your business. Recurring expenses may include accountancy fees, insurance, phone bills, professional subscriptions etc.

One-Off Expenses

One off expenses include items such as computer equipment, training courses, eligible travel costs etc.

Bonus

Your bonus is paid in addition to regular pay.

Overtime

Overtime refers to any hours worked that exceed your normally scheduled working hours.

Taxable Benefits

A taxable benefits (or ‘benefit in kind’) is any non-cash benefit of monetary value provided by a company to an employee that isn’t ‘wholly and exclusively’ for the purposes of the business. They are often called 'perks', 'fringe benefits' or 'notional pay'.

Companies use benefits in kind to reward employees over and above paying their wages and bonuses. The rewards have a monetary value attached, so they are treated as taxable income.

Employment Costs

Employment costs are the statutory expenses that an umbrella company must pay because it is acting as your employer. They are not deductions from your personal pay; instead, they are part of the employer's cost of hiring you.

Breakdown
  • Umbrella Margin
  • Employer's NI
  • Apprenticeship Levy
  • Employer's Workplace Pension

Adjusted Net Income

Adjusted Net Income is your total taxable income before any Personal Allowances, less any qualifying pension contributions. Key points of note:

  • Your personal allowance is reduced by £1 for every £2 that your net income is above £100,000, and your allowance is zero if your net income is £125,140 or above.
  • If your net income exceeds £100,000, you are no longer eligible for Tax-Free Childcare. Eligibility ends as soon as either partner crosses the threshold.
  • If your net income exceeds £100,000, you will likely need to submit a Self-Assessment tax return.

Taxes

Breakdown
  • Income Tax
  • Dividend Tax
  • National Insurance

Other Deductions

Breakdown
  • Pension Contributions
  • Student Loan

Other Additions

Breakdown
  • Pension Contributions
  • Accrued Holiday Pay

Total Capital

Total capital consists of your take home pay, plus any pension contributions and accrued holiday pay. It is designed to give a more accurate representation of the overall financial gain from a contract and can be compared against the same figure in our Outside IR35 Calculator.

Details

Take Home
Salary ---
Bonus ---
Overtime ---
Cash Allowances ---
Gross Pay ---
Taxable Benefits ---
Other Income ---
Salary Sacrifice ---
Employee’s Workplace Pension ---
Adjusted Net Income

Adjusted Net Income is your total taxable income before any Personal Allowances, less any qualifying pension contributions. Key points of note:

  • Your personal allowance is reduced by £1 for every £2 that your net income is above £100,000, and your allowance is zero if your income is £125,140 or above.
  • If you or your partner have adjusted net income above £100,000, you are no longer eligible for Tax-Free Childcare. Eligibility ends as soon as either partner crosses the threshold.
  • If your net income exceeds £150,000, you will likely need to submit a Self-Assessment tax return.
 ---
Income Tax ---
Dividend Tax ---
National Insurance ---
Student Loan ---
Take Home ---
Pension Contributions ---
Total Capital

Total capital consists of your take home pay, plus any pension contributions and accrued holiday pay. It is designed to give a more accurate representation of the overall financial gain from a contract and can be compared against the same figure in our Inside IR35 and Outside IR35 Calculators.

 ---
Taxes Income Rate Tax
Personal Allowance --- 0% ---
Basic Rate --- 20% ---
Higher Rate --- 40% ---
Additional Rate --- 45% ---
Income Tax --- ---
Dividend Allowance --- 0% ---
Personal Allowance --- 0% ---
Basic Rate --- 10.75% ---
Higher Rate --- 35.75% ---
Additional Rate --- 39.35% ---
Dividend Tax --- ---
Total Income Tax --- ---
< Primary Threshold --- 0% ---
> Primary Threshold --- 8% ---
> Upper Earnings --- 2% ---
Total National Insurance National Insurance ---
Total Tax --- ---

Salary Calculator Permanent Employee via PAYE

Use our salary calculator to calculate your take home pay while working as a permanent employee. Enter your salary below to check tax deductions and total income.

  • Salary & Bonus
  • Workplace Pensions
  • Salary Sacrifice
  • Take Home & Tax
Salary Calculator

Inputs

£
Calculate

Choose tax year

2026/2027

My tax code is

I pay tax in Scotland

Your tax code is: 1257L

My National Insurance letter is

Overtime 1

£

Overtime 2

£

Other income received

£

Other dividends received

£

Blind person's allowance

Marriage allowance

Cash allowance

£

Student Loan

Taxable benefits

£

Outputs

Broken down by:

Take Home
Salary ---
Other Additions
Breakdown
  • Bonus: ---
  • Overtime: ---
  • Cash Allowances: ---
 ---
Gross Pay ---
Other Income
Breakdown
  • Other Income: ---
  • Other Dividends: ---
  • Taxable Benefits: ---
 ---
Pension Contributions ---
Adjusted Net Income

Adjusted Net Income is your total taxable income before any Personal Allowances, less any qualifying pension contributions. Key points of note:

  • Your personal allowance is reduced by £1 for every £2 that your net income is above £100,000, and your allowance is zero if your income is £125,140 or above.
  • If you or your partner have adjusted net income above £100,000, you are no longer eligible for Tax-Free Childcare. Eligibility ends as soon as either partner crosses the threshold.
  • If your net income exceeds £150,000, you will likely need to submit a Self-Assessment tax return.
 ---
Taxes
Breakdown
  • Income Tax: ---
  • Dividend Tax: ---
  • National Insurance: ---
 ---
Student Loan ---
Take Home ---
Pension Contributions ---
Total Capital

Total capital consists of your take home pay, plus any pension contributions and accrued holiday pay. It is designed to give a more accurate representation of the overall financial gain from a contract and can be compared against the same figure in our Inside IR35 and Outside IR35 Calculators.

 ---
INCOME RATE TAX
Totals —                     —

Salary Calculator Information

How to use the salary calculator

There are two ways to use the calculator:

Simplified

We recognise that tax rules can be complicated, so all you need to do is populate the salary input boxes, and we will do the rest. Our Salary Calculator has been pre-populated with the most common variables, so once you enter your salary, we can provide an accurate calculation. This is useful for those wanting to calculate an estimate of their take-home pay quickly.

Advanced

Our calculator offers dozens of editable input fields for those wanting more precise control over the variables used in their salary calculation. Our calculator uses the calculation methodologies prescribed by HMRC, so adjusting these input fields to represent the actual working arrangements of the contract in question will provide an accurate breakdown between take-home pay and all relevant deductions.

What do ‘Your Results’ mean?

This section explains the key figures shown in your calculation. Each term provides a different perspective on your earnings and helps you better understand your overall financial position.

Net Income

Net income is your total taxable income before any Personal Allowances, less any qualifying pension contributions. Your personal allowance is reduced by £1 for every £2 that your net income is above £100,000. Your allowance is zero if your income is £125,140 or above. If your net income exceeds £150,000, you will likely need to submit a Self-Assessment tax return.

Take Home

Take home is the amount you receive into your personal bank account after deducting all taxes, accrued holiday pay and student loan contributions.

Total Capital

Total capital consists of your take home pay, plus any pension contributions and accrued holiday pay. It is designed to give a more accurate representation of the overall financial gain from a contract and can be compared against the same figure in our Outside IR35 Calculator.

Adjusted Net Income

Adjusted Net Income (ANI) is a key HMRC calculation used to determine eligibility for tax allowances, benefits and filing requirements. It is not your gross salary, but your total taxable income before Personal Allowance, minus qualifying deductions.

Calculation Methodology

ANI includes employment income, benefits in kind, self-employment profits, rental income, dividends and savings interest. From this total, you deduct gross pension contributions (including salary sacrifice) and Gift Aid donations. The resulting figure is used to assess income-related thresholds.

£100k Taper

Once ANI exceeds £100,000, your Personal Allowance is reduced by £1 for every £2 of additional income. At £125,140, it is fully removed. This creates an effective marginal tax rate of around 60% between £100,000 and £125,140.

Childcare

If either partner has ANI above £100,000, eligibility for Tax-Free Childcare ends immediately. ANI is also used when calculating the High Income Child Benefit Charge.

Self-Assessment

If income exceeds £150,000, you will typically need to file a Self-Assessment tax return, even if taxed under PAYE.

Pension contributions and salary sacrifice reduce ANI, they can restore allowances, protect benefit eligibility and materially improve overall tax efficiency.

Why a salary calculator matters

A salary calculator is vital because it helps you understand the difference between the salary advertised by an employer and the amount you actually receive. Many people are surprised at the gap between gross salary and take-home pay, especially when they move into higher tax brackets or begin repaying a student loan.

A calculator allows you to understand the financial impact of a pay rise, evaluate different job offers, estimate your take-home pay from overtime or bonuses, and plan your budget with confidence. It also helps you understand how tax codes, benefits, pensions and deductions shape your final pay.

Why a salary calculator matters for contractors

A salary calculator is equally important for contractors, especially those working under varying engagement models, day rates and tax structures. Contractors often need to compare the financial implications of working inside IR35, outside IR35, or taking on a full-time salaried role, and the difference between these options can be significant. A traditional salary calculator designed for employees does not account for the complexities of contracting, which is why a specialised contractor salary calculator becomes essential for accurate planning.

Inside IR35

Contractors working inside IR35 are taxed similarly to employees through PAYE, meaning Income Tax and National Insurance are deducted at source. This reduces their take-home pay compared with an equivalent outside IR35 day rate, and it often removes the ability to claim common business expenses. A proper salary calculator allows contractors to see the real impact of inside IR35 taxation and how it compares with permanent employment. Without this insight, it is difficult to judge whether an inside IR35 contract offers genuine financial value compared with a full-time job with benefits such as holiday pay, pension contributions and employer NI.

Outside IR35

For contractors working outside IR35, take-home pay is calculated differently. They may draw income through a limited company structure, combining a low salary with dividends, and potentially factoring in allowable expenses, flat-rate VAT and corporation tax. A contractor salary calculator helps them understand how these elements affect net income, enabling them to compare outside IR35 contracting with both inside IR35 roles and salaried employment. This comparison is crucial because the headline day rate alone does not reflect true profitability or long-term earnings potential.

A calculator built for contractors also helps them evaluate contract offers more precisely. It shows how changes in day rate, contract length, business expenses, and tax rules impact take-home pay. This clarity allows contractors to negotiate better rates, assess whether a project is financially worthwhile, and plan for gaps between contracts. Without clear calculations, contractors may underestimate tax liabilities or overestimate profitability, which can lead to budgeting issues later on.

How our salary calculator works

Our salary calculator begins with your gross annual salary. This is the total amount you earn before any deductions are applied. The calculator then applies Income Tax based on the current tax bands. Income above the Personal Allowance amount is taxed at 20 percent until you reach the higher rate threshold, where additional income is taxed at 40 percent. Income over the top threshold is taxed at 45 percent. The calculator also manages situations where your Personal Allowance is reduced, such as when you earn more than £100,000 a year.

Next, the Salary Calculator calculator applies National Insurance contributions. Employees in the UK pay Class 1 National Insurance based on their weekly or monthly salary. Income between the lower threshold and the upper threshold is charged at eight percent, while income above the upper threshold is charged at two percent. These contributions help you qualify for benefits such as the State Pension, maternity pay, paternity pay and statutory sick pay.

The calculator then deducts pension contributions if you are part of a workplace pension scheme. Most UK employees are automatically enrolled into a pension, with typical contributions set at 8% of qualifying earnings, split between employee (5%) and employer (3%). Pension deductions are usually tax-efficient because they reduce your taxable income. The calculator accounts for this and adjusts your take-home pay accordingly.

If you have a student loan, the salary calculator applies the correct repayment plan. Different plans have different repayment thresholds and rates, depending on when and where you studied. Repayments only begin when your salary exceeds the relevant threshold, and only the income above the threshold is subject to repayment. Postgraduate loans are repaid separately from undergraduate loans and have their own rules.

Finally, the calculator may apply other additions and deductions such as salary sacrifice schemes, bonuses, overtime and tax code adjustments. When completed, it provides an accurate estimate of your annual, monthly, weekly and daily take-home pay.

How tax codes impact your take-home pay

Tax codes play a significant role in determining how much tax is deducted from your salary each month. Most people in the UK have the standard 1257L tax code, which grants them the full Personal Allowance. However, temporary or emergency tax codes, such as 0T or BR, can lead to higher deductions and unexpectedly low take-home pay. A salary calculator helps you understand how your tax code impacts your earnings by showing how much tax you would pay under the correct code compared with an incorrect one. It also explains why your take-home pay may change when HMRC updates your tax code mid-year due to changes in benefits, second jobs, underpaid tax from previous years, or adjustments to allowances.

How bonuses are taxed

Bonuses often appear to be heavily taxed, which leads many employees to feel disappointed when the final amount enters their bank account. This happens because bonuses are added to your salary and taxed through PAYE in the month or week they are paid. If your bonus temporarily pushes your earnings into a higher tax bracket, you may pay more tax and National Insurance than expected. A salary calculator helps you estimate the take-home value of your bonus by showing the exact deductions applied. It also helps explain why bonus payments sometimes appear to attract more tax even though the rate applied is the same as your regular income tax. Understanding this makes it easier to plan for large payouts and reduces surprises when your bonus arrives.

National Insurance

National Insurance (NI) is deducted alongside Income Tax through PAYE and directly affects your take-home pay. Our Salary Calculator models both employee and employer contributions so you can see the full impact on net income and total employment cost.

Employee NI

Employees pay Class 1 National Insurance on earnings above the Primary Threshold. Income within the main band is charged at 8%, and income above the Upper Earnings Limit is charged at 2%. NI is separate from Income Tax and generally applies if you are under State Pension age and earning above the threshold.

Employer NI

Employers pay Class 1 National Insurance at 13.8% on earnings above the Secondary Threshold. This does not reduce your net salary directly but increases the total cost of employment, which is important when comparing permanent roles with contract work.

Benefits and Allowances

Benefits in Kind (such as a company car or private medical insurance) trigger Income Tax for the employee, while the employer pays Class 1A NI at 13.8%. Cash allowances are treated as salary, meaning both employee and employer NI apply.

Salary Sacrifice

Because NI is calculated on gross earnings, reducing salary through pension salary sacrifice lowers both employee and employer NI, improving tax efficiency.

Inside IR35 contracts are taxed through PAYE, meaning Income Tax, employee NI and employer NI all apply, often reducing the headline day rate. Outside IR35 contractors pay NI only on salary drawn from their company, with no NI due on dividends, allowing more flexible income structuring.

Student loan repayments

Our Salary Calculator includes UK student loan repayment calculations so you can see the true impact on your take-home pay. Repayments only apply once your income exceeds your plan threshold, and you repay a fixed percentage of earnings above that threshold, not your entire salary.

Different plans (Plan 1, Plan 2, Plan 4 and Postgraduate loans) have different thresholds and repayment rates.

Scottish salary calculations

Scotland uses a different Income Tax structure from the rest of the UK, which means Scottish residents may take home more or less money even when earning the same gross salary as someone in England or Wales. A salary calculator that supports Scottish tax rates explains how the Starter, Basic, Intermediate, Higher, and Top bands affect take-home pay. These additional tax bands create a more graduated tax structure, and this can be confusing without a clear breakdown. A calculator tailored to Scotland helps users understand why their take-home pay differs from colleagues in other regions and how crossing a threshold affects marginal tax rates. This is particularly useful for employees who move between regions, contractors working nationwide, and employers managing workers across the UK.

Converting hourly, weekly, monthly and annual pay

Many workers in the UK are paid hourly, while others think in terms of monthly or annual salaries. A salary calculator helps convert between these formats with accuracy, enabling users to understand how an hourly rate translates into annual income and vice versa. Someone earning an hourly wage may want to know how their income compares to a full-time salaried role, while salaried employees may use conversions to estimate the value of overtime or freelance work. Converting between weekly, monthly and annual pay helps users compare offers from different industries or roles and evaluate whether changes in working hours will impact their lifestyle. Our salary calculator simplifies these conversions and provides a consistent and accurate view of true earning potential.

How salary sacrifice impacts take home pay

Salary sacrifice schemes such as pension contributions, electric vehicle programmes, childcare benefits or cycle-to-work schemes are becoming increasingly popular because they reduce taxable income and improve tax efficiency. However, many people struggle to understand how these schemes affect their take-home pay. A salary calculator helps demonstrate how salary sacrifice arrangements reduce gross pay, lower Income Tax and National Insurance, and increase net tax efficiency. It also shows the long-term financial benefits of pension salary sacrifice and helps users compare different contribution levels. This makes it easier to decide whether to join or increase participation in a salary sacrifice scheme and understand the net impact on everyday finances.

Annual tax system updates

The UK tax system changes every year, and these updates can significantly influence take-home pay. Our salary calculator incorporates the latest tax rules to allow users to see how changes affect them immediately. Whether the Personal Allowance has shifted, National Insurance rates have been adjusted, or student loan thresholds have changed, our salary calculator helps users understand what the new tax year means for their finances. This is particularly valuable for those evaluating job offers, planning salary negotiations or budgeting for the year ahead. A year-to-year comparison also helps users understand whether they are better or worse off under new tax rules.

Salary Calculator Permanent Employee via
PAYE

Use our salary calculator to calculate your take home pay while working as a permanent employee. Enter your salary below to check tax deductions and total income.

  • Salary & Bonus
  • Workplace Pensions
  • Salary Sacrifice
  • Take Home & Tax

Inputs

£

Outputs

Broken down by:

Take Home
Salary ---
Other Additions
Breakdown
  • Bonus: ---
  • Overtime: ---
  • Cash Allowances: ---
 ---
Gross Pay ---
Other Income
Breakdown
  • Other Income: ---
  • Other Dividends: ---
  • Taxable Benefits: ---
 ---
Pension Contributions ---
Adjusted Net Income

Adjusted Net Income is your total taxable income before any Personal Allowances, less any qualifying pension contributions. Key points of note:

  • Your personal allowance is reduced by £1 for every £2 that your net income is above £100,000, and your allowance is zero if your income is £125,140 or above.
  • If you or your partner have adjusted net income above £100,000, you are no longer eligible for Tax-Free Childcare. Eligibility ends as soon as either partner crosses the threshold.
  • If your net income exceeds £150,000, you will likely need to submit a Self-Assessment tax return.
 ---
Taxes
Breakdown
  • Income Tax: ---
  • Dividend Tax: ---
  • National Insurance: ---
 ---
Student Loan ---
Take Home ---
Pension Contributions ---
Total Capital

Total capital consists of your take home pay, plus any pension contributions and accrued holiday pay. It is designed to give a more accurate representation of the overall financial gain from a contract and can be compared against the same figure in our Inside IR35 and Outside IR35 Calculators.

 ---
INCOME RATE TAX
Totals —                     —

Calculator Inputs Timing

£

Timing

Tax Year

Choose tax year

2026/2027

Tax Code

My tax code is

I pay tax in Scotland

Your tax code is: 1257L

My National Insurance letter is

Other

Other income received

£

Other dividends received

£

Blind person's allowance

Marriage allowance

Cash allowance

£

Student Loan

Pension

Bonus

Overtime

Overtime 1

£

Overtime 2

£

Benefits

Taxable benefits

£
Calculate

Calculator Inputs

Per
Salary Calculator Information

How to use the Salary Calculator

There are two ways to use the calculator:

Simplified

We recognise that tax rules can be complicated, so all you need to do is populate the "Gross Pay" and "Frequency" input boxes, and we will do the rest. Our salary calculator has been pre-populated with the most common variables, so once you enter your salary, we can provide an accurate estimate of the financial implications of working as a permanent employee being taxed via PAYE. This is useful for those wanting to calculate an estimate of their take-home pay quickly.

Advanced

Our calculator offers dozens of editable input fields for those wanting more precise control over the variables used in the salary calculation. Our calculator uses the calculation methodologies prescribed by HMRC, so adjusting these input fields to represent your actual working arrangements will provide an accurate breakdown between take-home pay and all relevant deductions.

What do ‘Your Results’ mean?

This section explains the key figures shown in your calculation. Each term provides a different perspective on your earnings and helps you better understand your overall financial position.

Gross Pay

Gross pay is your total salary before any tax, National Insurance, or other deductions. It can include basic salary, bonus, overtime, and cash allowances. Our calculator builds gross pay from the inputs you provide.

Taxable Income

Taxable income is the amount used to calculate income tax. It is usually gross pay minus any salary sacrifice pension contributions and other allowable deductions. Your personal allowance and tax bands are applied to this figure.

Take Home

Take home is the amount you receive into your personal bank account after deducting income tax, National Insurance, student loan repayments (if applicable), and any other deductions. It is the net pay shown on your payslip.

Why a Salary Calculator Matters

Understanding how much you will actually take home from your salary helps with budgeting, comparing job offers, and planning for tax and pension. A salary calculator shows the impact of tax codes, bonuses, pension contributions, and pay frequency so you can see your real pay after deductions.

Why a Salary Calculator Matters For Contractors

Contractors comparing permanent roles with their current day rate need to convert salary into like-for-like take-home pay. Our salary calculator helps you see what a given annual or monthly salary means in net terms, so you can compare it fairly with contract earnings and make informed decisions about going permanent or staying contracting.

How Our Salary Calculator Works

Our calculator uses HMRC rules and rates for income tax, National Insurance, and (where applicable) Scottish income tax. You enter your gross pay and frequency, plus optional details such as bonus, overtime, tax code, pension contributions, and student loan plan. The calculator then applies the correct tax bands, allowances, and deductions to show taxable income, total tax and NICs, and take-home pay.

How Tax Codes Impact Your Take-Home Pay

Your tax code determines how much of your income is tax-free (personal allowance) and how it is allocated across the year. A wrong or outdated tax code can mean too much or too little tax is deducted. Our calculator lets you enter your tax code so you can see how it affects your take-home pay. Common codes include 1257L (standard allowance) and variants for week 1/month 1 or reduced allowance.

How Bonuses Are Taxed

Bonuses are taxable as income and are subject to income tax and National Insurance in the same way as regular pay. They are often taxed using your normal tax code in the pay period in which they are paid, which can push you into a higher band for that period. Our calculator includes an optional bonus field so you can see the combined effect of salary and bonus on your take-home pay.

Scottish Salary Calculations

Scotland has its own income tax bands and rates, which differ from the rest of the UK. If you are a Scottish taxpayer, your salary is subject to Scottish rates. Our calculator can reflect Scottish tax where applicable, so you get an accurate estimate of take-home pay based on your residency and tax position.

Converting Hourly, Weekly, Monthly and Annual Pay

Salaries are often quoted as annual figures, but you may think in weekly or monthly terms. Our calculator accepts different pay frequencies and converts between them so you can enter the figure you know (e.g. hourly or monthly) and see annualised gross pay, as well as take-home pay for your chosen frequency. This makes it easier to compare roles or plan your budget.

How Salary Sacrifice Impacts Take-Home Pay

Salary sacrifice reduces your gross pay before tax and National Insurance are calculated. Common uses include pension contributions, cycle-to-work schemes, and childcare vouchers. Because the sacrifice is taken from gross pay, you save income tax and (often) NICs on the amount sacrificed. Our calculator allows you to enter salary sacrifice pension contributions so you can see the effect on taxable income and take-home pay.

Annual Tax Year Updates and Salary Calculations

Tax bands, rates, and allowances change each tax year. Our salary calculator is updated to reflect the current tax year so that your estimate uses the correct thresholds and rates. When a new tax year is announced, we update the calculator so you can model how changes will affect your take-home pay.