Salary Calculator
Whether you are budgeting for a new mortgage, negotiating a pay rise, or comparing two job offers, what matters is not your headline salary but what actually lands in your bank account. Our salary calculator works out your exact take-home pay for 2026/27, factoring in income tax, National Insurance, pension contributions and student loan repayments together.
Salary Calculator
See your exact take-home pay after tax, National Insurance, pension and student loan deductions — useful for working out what you can afford to borrow.
Why Two Similar Salaries Can Feel Very Different
A £45,000 salary and a £50,000 salary sound like a meaningful gap on paper, but the difference in take-home pay is smaller than most people expect, because the additional £5,000 is taxed at your marginal rate — 20% income tax plus 8% National Insurance for most earners in this range — meaning roughly 28p of every extra pound above £50,270 disappears in tax and NI once you cross into the higher rate band, and even more once student loan repayments are added on top.
Pension Contributions: More Valuable Than They Look
Pension contributions reduce your taxable pay before tax and National Insurance are calculated, which means the true cost to you is lower than the amount going into your pension. A basic-rate taxpayer contributing £100 a month effectively only feels around £72 in reduced take-home pay, once the tax and NI saving is accounted for — the rest is, in effect, subsidised by the tax system. This makes pension saving one of the most efficient ways to build wealth, particularly for anyone whose income sits close to a tax band boundary.
Student Loan Repayments Explained
If you have a student loan, repayments are deducted automatically through PAYE once your income exceeds your specific plan’s threshold — these thresholds differ meaningfully by plan (Plan 1, Plan 2, Plan 4 for Scotland, or Plan 5), and repayments are calculated at 9% of income above the threshold (6% for Postgraduate Loans). Crucially, student loan repayments reduce your take-home cash but do not reduce your taxable income for income tax purposes — they are a separate deduction layered on top.
A Worked Example
On a £38,000 salary with a 5% pension contribution and a Plan 2 student loan, taxable pay after pension is £36,100. Income tax comes to roughly £4,706, National Insurance around £1,882, and student loan repayments (on income above the Plan 2 threshold) approximately £604. After the £1,900 pension contribution as well, monthly take-home pay lands at around £2,408 — a helpful, concrete figure when working out what mortgage repayment level is genuinely comfortable.
How This Feeds Into Mortgage Planning
Lenders broadly want your mortgage payment to sit within a sensible proportion of your net income — commonly cited guidance suggests around a third or less. Once you know your real take-home pay from this calculator, you can sense-check any mortgage quote against that figure before formally applying, using our Mortgage Calculator to check the monthly payment on a given loan.
Comparing Job Offers on a Like-for-Like Basis
When comparing two job offers with different headline salaries, benefits and pension schemes, looking purely at gross pay can be misleading. A slightly lower salary with a more generous employer pension match, private medical cover, or additional annual leave can genuinely outweigh a marginally higher gross figure once everything is accounted for. Running each offer through this calculator, factoring in the actual pension percentage on offer, gives you a genuine like-for-like take-home comparison — and if relocating for the new role involves a different cost of living or commuting costs, factoring those in alongside the take-home figures gives the most complete picture for making the decision.
Frequently Asked Questions
Why is my actual payslip different from this calculator?
The most common reason is a non-standard tax code — anything other than the standard 1257L code can change your deductions. Other factors include benefits in kind, salary sacrifice arrangements for things like cycle-to-work schemes, or bonus payments taxed differently in a given month.
Does this calculator work for hourly pay?
Yes — select the hourly option and enter your hourly rate; the calculator annualises it assuming a standard 37.5-hour week, which you can adjust for if your actual hours differ significantly.
What if I have two jobs?
This calculator assumes a single income source. With two jobs, your Personal Allowance is typically applied to one job only, meaning the second job’s income may be taxed at a higher effective rate than this tool would suggest — a specialist multi-income calculation is more accurate in that case.
Are bonuses taxed differently?
Bonuses are taxed as ordinary income in the month received, but because PAYE assumes a consistent monthly income, a large one-off bonus can push that month’s pay into a higher tax band temporarily, even if your overall annual tax works out correctly by the end of the tax year.