How We Calculate UK Take-Home Pay — Methodology

How we calculate UK take-home pay

The UK calculators run on Salary Codex's own rules engine. Every rate and threshold comes from HMRC, the Scottish Government or the Department for Work and Pensions, and each release is tested before it ships. The documents are listed on the data sources page. Tax years run from 6 April to 5 April; "2026/27" means 6 April 2026 to 5 April 2027.

Order of operations

Gross salary — your contractual annual pay.
Salary sacrifice, if chosen, lowers that pay before anything else, so Income Tax, National Insurance and student loan repayments are all worked out on the lower figure.
Net pay pension contributions come off before Income Tax but not before National Insurance.
Adjusted net income: pay after those, less any gross relief-at-source contribution. It decides the Personal Allowance taper and the High Income Child Benefit Charge.
Personal Allowance of £12,570, reduced by £1 for every £2 of adjusted net income above £100,000. Marriage Allowance moves £1,260 of it between spouses or civil partners when neither pays tax above the basic rate (intermediate rate in Scotland).
Income Tax on taxable income: 20%, 40% and 45% in England, Wales and Northern Ireland; six rates from 19% to 48% for Scottish taxpayers. Band limits are amounts of taxable income. In Scotland the top rate starts at £125,140 of taxable income, as set by the Scottish Rate Resolution.
Class 1 National Insurance: 8% between the primary threshold and the upper earnings limit, 2% above. None is due above State Pension age.
Student and postgraduate loans: 9% (6% for postgraduate loans) of pay above the plan threshold.
High Income Child Benefit Charge when you or your partner claim Child Benefit: 1% of it for every £200 of adjusted net income above £60,000, all of it from £80,000. Child Benefit is counted at the weekly rate × 52.

Annual figures and payroll

Income Tax is shown as the liability for the year, which is what PAYE's cumulative calculation arrives at for steady pay. National Insurance and student loans are not cumulative: payroll works them out each pay period. When you choose monthly or weekly pay we do the same — National Insurance on the period thresholds (£1,048 and £4,189 a month), and student loan deductions on pay above the period threshold, rounded down to whole pounds as in GOV.UK's worked examples. "Annual figures" uses the yearly thresholds instead.

Pensions

Contributions can be set on qualifying earnings (between £6,240 and £50,270, the automatic-enrolment band) or on full salary. With relief at source you pay 80% of the gross contribution from take-home pay and the provider adds 20%; the basic-rate band and the bands above it are extended by the gross contribution so higher-rate relief is reflected (from the intermediate band upwards for Scottish taxpayers). Employer contributions appear in the cost to employer, with employer National Insurance at 15% above £5,000.

Tests

Test	Scope	Result
HMRC and Scottish Government bands	Every band, rate and threshold for 2025/26 and 2026/27 against the employer tables and the Scottish Rate Resolution	All match
GOV.UK worked examples	Student loan deductions (Plan 1 on £33,000, Plan 4 on £36,000), Personal Allowance taper, Marriage Allowance, Child Benefit charge	All reproduced
Independent cross-check	Income Tax, employee NI, student loans and the Child Benefit charge for every £1,000 from £0 to £300,000, four nations, nine profiles, two tax years — 56,588 values compared with PolicyEngine-UK, an independent open-source model	0 unexplained differences

Where other models differ

The independent cross-check differs from us in three places, each traced to the law:

Scottish top rate. Some models start the 48% rate at £112,570 of taxable income (£125,140 minus a full Personal Allowance). The Scottish Rate Resolution sets the advanced-rate limit at £125,140 of taxable income, and the Scottish Government's explanatory note says the Personal Allowance is not relevant to that limit.
Net pay pensions and the £100,000 taper. Adjusted net income is reduced by pension contributions under a net pay arrangement, so a contribution can restore Personal Allowance. Models that ignore this show up to several hundred pounds more tax between £100,000 and £135,000.
Child Benefit charge rounding. We round the charge once on the total Child Benefit; some models round it separately for each child, which can differ by £1.

Not yet included

Tax codes other than 1257L, benefits in kind and multiple jobs.
Income other than employment income, and Universal Credit.
Self-employment (Class 2 and Class 4 National Insurance).

Updates and errors

Rules are updated when HMRC, the Scottish Government or the Welsh Government publish a change; the version and verification date appear on every calculator. If a result does not match your payslip, tell us — corrections ship as a new rules version with a new verification date.

Estimates only. Not tax, legal or financial advice.