Find out exactly what lands in your bank account after tax, National Insurance, student loan and pension.
Updated for 2025/26 · Includes all deductions
Most people are on 1257L. Check your payslip if unsure.
Scotland has different income tax rates.
Plan 1: started before Sept 2012. Plan 2: started Sept 2012–July 2023. Plan 5: started Aug 2023 onwards.
Salary sacrifice reduces your NI contributions too. Relief at source is added back by your pension provider.
Based on 2025/26 HMRC tax rates and thresholds. For personal tax advice consult a qualified accountant or visit gov.uk.
In the 2025/26 tax year, the first £12,570 you earn is tax-free (the personal allowance). You pay 20% income tax on earnings between £12,571 and £50,270, 40% on earnings between £50,271 and £125,140, and 45% on anything above £125,140. If you earn over £100,000, your personal allowance is gradually reduced — it disappears entirely at £125,140. Scottish taxpayers pay different rates set by the Scottish Government.
For 2025/26, employees pay National Insurance at 8% on earnings between £12,570 and £50,270 per year, and 2% on earnings above £50,270. There is no National Insurance on earnings below £12,570. Note that National Insurance is calculated on a weekly or monthly basis by your employer, not annually.
The personal allowance for 2025/26 is £12,570 — the same as it has been since 2021. This means the first £12,570 of your annual income is completely free of income tax. If you earn over £100,000, your personal allowance reduces by £1 for every £2 you earn above this threshold, reaching zero at £125,140.
Your tax code tells your employer how much tax-free income you are entitled to. The most common code is 1257L, which means you have the standard personal allowance of £12,570. The number is the allowance divided by 10. If your code is BR, you are being taxed at the basic rate on all income with no personal allowance — this is common for second jobs. Check your payslip or contact HMRC if you are unsure your code is correct.
Student loan repayments are taken automatically through payroll once your income exceeds the repayment threshold for your plan. Plan 1 (started before September 2012): 9% on earnings above £24,990. Plan 2 (started September 2012 to July 2023): 9% on earnings above £27,295. Plan 5 (started August 2023 onwards): 9% on earnings above £25,000. Postgraduate loans: 6% on earnings above £21,000 per year. You can have both an undergraduate and postgraduate loan deducted simultaneously.
Yes. Pension contributions attract tax relief, meaning you effectively pay them from pre-tax income. With salary sacrifice, your gross salary is reduced before tax and NI are calculated, saving you both income tax and National Insurance. With relief at source, contributions are taken from your net pay and your pension provider claims basic rate tax relief back on your behalf. Higher rate taxpayers can claim additional relief through self-assessment.