What's your real take-home pay?

Take-home pay (net salary) is your gross salary minus Income Tax, National Insurance, pension contributions and any student loan deductions. Income Tax uses the £12,570 Personal Allowance, then 20% on income up to £50,270, 40% up to £125,140, and 45% above. Class 1 Employee NIC is 8% between £12,570 and £50,270, then 2% above. Student loans are 9% above the relevant threshold (£27,295 for Plan 2, etc). Pension contributions made through salary sacrifice or net pay arrangement reduce your taxable salary directly.

On £50,000 gross salary in 2025/26 with no pension or student loan, take-home pay is approximately £39,520 per year (£3,293 per month). The deductions are: Income Tax £7,486, Employee NIC £2,994. If you have a Plan 2 student loan, an additional £2,043 comes off, leaving £37,477. If you contribute 5% to pension via salary sacrifice (£2,500), your taxable pay drops to £47,500 and your cash take-home becomes about £37,720, while £2,500 also goes into your pension pot. The tax and NIC on the contribution are saved, a net wealth gain.

On £100,000 gross salary in 2025/26 with no pension or student loan, take-home pay is approximately £68,557 per year (£5,713 per month). Deductions: Income Tax £27,432, Employee NIC £4,011. If you go above £100,000, the Personal Allowance starts to taper at £1 reduction per £2 over £100K, creating an effective marginal rate of 60% between £100K and £125,140. This is why pension contributions or other taxable income reductions are particularly valuable in this band.

Pension contributions made through salary sacrifice (or net pay arrangement) reduce your taxable salary at source. For a higher-rate taxpayer, every £1,000 contributed costs only £580 in lost take-home (saving £400 income tax and £20 NIC). For a basic-rate taxpayer, £1,000 contributed costs £720 in lost take-home (saving £200 tax and £80 NIC). For someone earning between £100K and £125,140, the effective saving rate hits 60% because the contribution restores the tapered Personal Allowance. We model optimal pension strategy in the £1,200 Tax Planning Workshop.

For employees, the main changes for 2026/27 are: tax bands remain frozen until April 2028 (continued fiscal drag pulls more income into higher rates), dividend tax rises by 2 percentage points on basic and upper rates (affects directors taking dividends), and the National Living Wage rises (affecting under-21 and lower-paid workers). The 8% / 2% Employee NIC structure stays the same. Use the calculator's tax year toggle to see your specific 2026/27 position.

Yes. The calculator handles the £100K Personal Allowance taper correctly (£1 reduction per £2 above £100K, producing the 60% marginal trap between £100K and £125,140), the additional rate threshold at £125,140, and the 2% NIC rate above £50,270. It does not currently model: car benefits, private medical insurance, share scheme income, redundancy payments, or non-cash benefits. For complex tax positions, our £1,200 Tax Planning Workshop reviews the full picture and identifies optimisation opportunities most employees miss.