Take Home Pay: A UK Guide to What You Keep Each Month

Take home pay is the money that reaches your bank account after tax and National Insurance. Your payslip shows a gross salary, yet the figure you actually receive each month sits lower. This guide explains how UK income tax, National Insurance and other deductions shape what you actually keep. It also shows you how to work out the figure for yourself.

What Is Take Home Pay?

Take home pay means your net pay. It is the amount left after your employer takes Income Tax and National Insurance from your gross pay. Your employer sends those deductions to HMRC before the rest reaches you. Pension contributions and student loan repayments can reduce the figure further. As a result, your net pay reflects every deduction on your payslip.

Your gross pay is the headline figure in your contract. Your take home pay is the figure that matters for your budget, because it shows what you can actually spend. The gap between the two figures comes from tax and National Insurance, and the gap grows as your pay rises.

How Your Gross Pay Becomes Take Home Pay

Three steps turn gross pay into take home pay. First, HMRC gives you a tax-free Personal Allowance. Second, your employer applies the UK tax brackets to the income above that allowance. Third, your employer takes National Insurance from your pay above a weekly threshold. Your payslip lists each deduction, so you can trace the path from gross pay to net pay.

Your employer runs this process through PAYE, which stands for Pay As You Earn. PAYE takes tax and National Insurance from your wages before you get paid. As a result, you do not need to set the money aside yourself. Your tax code tells your employer how much tax-free pay you get. HMRC can change that code during the year.

UK Income Tax Brackets in 2026–27

UK income tax uses bands, so different slices of your income face different rates. The tax year runs from 6 April 2026 to 5 April 2027. These are the UK income tax brackets for that year:

• Personal Allowance: up to £12,570 — 0%
• Basic rate: £12,571 to £50,270 — 20%
• Higher rate: £50,271 to £125,140 — 40%
• Additional rate: over £125,140 — 45%

Tax applies only to income above your Personal Allowance. For example, a basic-rate taxpayer pays 20% on income between £12,571 and £50,270. Income above £50,270 falls into the higher rate. A pay rise can push part of your salary into the 40% band. Scotland sets its own income tax bands, so Scottish taxpayers should check the Scottish rates instead.

If you earn more than £100,000, your Personal Allowance shrinks. HMRC cuts it by £1 for every £2 of income above £100,000. The allowance reaches zero at £125,140, so high earners pay tax on all their income.

Your Personal Allowance and Tax Code

Your Personal Allowance is the amount of income you do not pay tax on. The standard allowance is £12,570 for the 2026–27 tax year. Your tax code reflects your personal tax allowance in shorthand. A common code is 1257L, which means £12,570 of tax-free pay. HMRC can adjust your code for things like company benefits or underpaid tax from an earlier year.

You can check your code with the HMRC tax code checker. This free online tool shows your current code and explains what it means. If the code looks wrong, tell HMRC or your employer. A wrong code can take too much tax from your pay or too little. Your payslip shows your tax code each month, so give it a quick look when payday arrives.

National Insurance: What Comes Off Your Pay

National Insurance sits beside income tax on your payslip, and it also reduces your take home pay. Employees pay Class 1 National Insurance when they earn more than £242 a week from one job. The rate is 8% on weekly pay between £242 and £967, which is £1,048 to £4,189 a month. Pay above £967 a week faces a 2% rate.

Your employer takes National Insurance from your wages before you get paid. Your payslip shows the amount, and the money counts towards your State Pension and certain benefits. You stop paying Class 1 National Insurance when you reach State Pension age. If you earn between £129 and £242 a week, you usually pay nothing. Even so, the weeks still count towards your National Insurance record.

A Worked Example: Take Home Pay on a £30,000 Salary

A worked example makes the maths clear. Take a salary of £30,000 a year, paid monthly. Gross monthly pay is £2,500. Income tax and National Insurance then come off that figure.

• Gross pay: £30,000 a year.
• Personal Allowance: £12,570.
• Taxable income: £30,000 − £12,570 = £17,430.
• Income tax: 20% × £17,430 = £3,486 a year (£290.50 a month).
• National Insurance: monthly pay above the £1,048 threshold is £1,452. 8% × £1,452 = £116.16 a month (£1,393.92 a year).
• Take home pay: £30,000 − £3,486 − £1,393.92 = £25,120.08 a year, or about £2,093.34 a month.

This example covers tax and National Insurance only. Pension contributions, student loan repayments and salary sacrifice would cut the figure further. Even so, the steps show how each deduction works. You can repeat them with your own salary to estimate your net pay.

The same maths also gives you an hourly rate. A £30,000 salary means £576.92 a week over 52 weeks. Divide that by 37.5 hours and you get £15.38 an hour before tax. After tax and National Insurance, the net hourly rate is about £12.88. A salary to hourly rate calculator does this sum for you. Even so, the manual steps show exactly where the numbers come from.

What Else Can Reduce Your Pay?

Tax and National Insurance are the main deductions, yet other items can shrink the amount you keep. Workplace pension contributions come off your pay before tax in many schemes, which lowers your taxable income. Student loan repayments start once your income passes a threshold, and your employer takes them through PAYE. Court orders can also reduce your pay, though these apply only in specific cases.

A pay rise does not always lift your net pay by the full amount. A higher salary can push part of your income into the 40% band. As a result, the extra pay faces a higher rate. For this reason, check the net effect before you celebrate a rise. Our guide to managing rising household costs shows how to plan around the figure you actually receive.

Salary Sacrifice: How It Changes Your Pay

Salary sacrifice lets you swap part of your cash pay for a non-cash benefit. Pension contributions and a cycle-to-work bike are common examples. Your employer agrees the change with you and updates your contract. The cash you give up no longer counts as taxable pay. As a result, you pay less Income Tax and National Insurance on it.

Changes to salary sacrifice rules can alter the picture, so check the current position before you sign up. A lower cash salary can also affect earnings-related benefits and statutory pay, because those payments link to your cash earnings. Pension contributions through salary sacrifice usually escape tax and National Insurance altogether, which makes them a popular choice. Always confirm the effect on your benefits before you agree to a change.

Tax on Savings Interest

Tax on savings can also touch your pay, though it works differently. Banks usually pay savings interest without taking tax off first. HMRC gives you a tax-free allowance for savings interest, so small amounts of interest escape tax. Interest above that allowance counts as taxable income, so it can add to your tax bill. You can check the current figures on GOV.UK’s income tax rates and allowances page. Keep an eye on your total interest across all accounts, because HMRC looks at the full amount.

How to Check Your Take Home Pay

You can check your net pay in three ways. First, read your payslip, which lists gross pay, tax, National Insurance and every other deduction. Second, use a PAYE calculator, which estimates your monthly net pay from your gross salary. Third, use the HMRC tax code checker to confirm your tax code and Personal Allowance. If the figures look wrong, speak to your employer or contact HMRC.

A quick monthly check keeps surprises away. Compare your payslip with the previous month, and look for changes in your tax code or deductions. A new job, a pay rise or a change in benefits can all shift your net pay. A five-minute check each payday gives you a clear picture of what you actually keep.

Frequently Asked Questions

What is take home pay?

Take home pay is the money you receive after Income Tax and National Insurance come off your gross pay. It is the figure that reaches your bank account each payday.

How do I work out my net pay?

Start with your gross salary, subtract your Personal Allowance to find your taxable income, then apply the tax bands. Next, take National Insurance off the pay above the weekly threshold. A PAYE calculator can do the maths for you.

Why is my net pay lower than my salary?

Your employer takes Income Tax and National Insurance from your pay before you receive it. Pension contributions and student loan repayments can reduce it further.

Does a pay rise always increase my net pay?

A pay rise usually lifts your net pay. Even so, part of the extra pay can fall into a higher tax band. The net rise is smaller than the gross rise when that happens.

Where can I check my tax code?

Use the HMRC tax code checker online. It shows your current code and explains what it means. Your payslip also shows your tax code each month.

This guide gives general information only. It is not financial or tax advice. Tax rules can change, and your own position depends on your income and circumstances. Speak to a qualified adviser if you need advice about your own tax.