What take home pay actually means, everything that comes off your gross salary in 2026/27, and how to work out your own number from your payslip.
Almost nobody is hired on their take home pay. You get offered a salary, or an hourly rate, and then a few weeks later a smaller number turns up in your bank account and you are left doing sums on the back of an envelope. The gap between those two figures is usually somewhere between 20% and 35%, and most of it is predictable once you know what is coming off.
This is the plain-English version: what it is, what gets deducted in the 2026/27 tax year, a worked example on a real salary, and how to check the number on your own payslip.
Your take home pay is your gross pay minus income tax, National Insurance, pension contributions, student loan repayments, and anything else your employer takes at source.
Payslips normally call it net pay. Recruiters and job ads call the other number, the one before deductions, gross pay. Salary after tax means the same thing as net pay. They are all the same concept described by different people who each think their word is the obvious one.
Five things, roughly in this order.
Income tax. For 2026/27 the personal allowance is £12,570, which is the slice you can earn before any income tax is due. Above that, you pay 20% up to £50,270, 40% from £50,271 to £125,140, and 45% above £125,140. Your tax code tells payroll how much allowance to give you. Most people are on 1257L. Scotland has its own bands and rates, so if you live north of the border the maths is close but not identical.
National Insurance. Employee NI is 8% on earnings between £12,570 and £50,270, then 2% on everything above. Unlike income tax, NI is worked out on each pay period on its own, which is why a single big bonus month can feel disproportionately punished.
Pension. If you were automatically enrolled, the standard employee contribution is 5%, with your employer adding at least 3%. Whether this reduces your taxable pay depends on the scheme. A net pay arrangement or salary sacrifice takes it before income tax is worked out. A relief-at-source scheme takes it after, and your provider claims the 20% back for you.
Student loan. Plan 1 starts at £26,900, Plan 2 at £29,385, Plan 5 at £25,000, all at 9% of what you earn above the threshold. Postgraduate loans start at £21,000 at 6%. If you have both an undergraduate and a postgraduate loan, both come off.
Everything else. Salary sacrifice for a car or cycle scheme, union subs, an attachment of earnings order, season ticket loans, and staff purchases. These vary enormously by employer and they are the usual culprit when your payslip does not match a calculator.
Here is the full chain on a fairly ordinary UK salary. Assume tax code 1257L, monthly pay, a 5% workplace pension taken before tax, and a Plan 2 student loan.
Add the deductions up and you get £6,955.75. Take home pay is £25,044.25 a year, or about £2,087 a month.
Now take the same person with no pension and no student loan. Income tax rises to £3,886, because there is no pension contribution reducing taxable pay, and NI is unchanged at £1,554.40. Take home becomes about £2,213 a month.
That £126 monthly difference is worth sitting with for a second. The pension is not money lost, it is money moved into your own pot with tax relief attached. The student loan genuinely is gone. Two deductions, very different meanings, and a payslip that presents them identically.
This is the part a bare salary-after-tax figure hides. Put two people on £32,000 side by side and the money that reaches their accounts can differ by well over £200 a month.
One is on Plan 5 rather than Plan 2, so their student loan threshold is £25,000 instead of £29,385 and they lose an extra £395 a year. One salary-sacrifices £200 a month into a pension and saves both income tax and National Insurance on it, while the other uses a relief-at-source scheme and saves only the tax. One has a company car sitting on their tax code as a benefit in kind, quietly shrinking their personal allowance. One picks up Sunday shifts and unsocial hours enhancements that push their gross pay around every month.
None of that is visible in a job advert. It is all visible on a payslip, which is why the payslip is the document worth learning to read rather than the contract.
If you are self-employed, nothing is deducted at source. Your gross income arrives whole and you owe tax on it later, which is the single biggest cash-flow trap in freelancing.
The structural differences: you pay Class 4 National Insurance rather than the employee 8%, you can deduct allowable business expenses before tax is calculated, and you settle up through Self Assessment by 31 January rather than monthly through payroll. You may also owe payments on account, which are advance instalments toward the following year’s bill.
The practical version: a freelancer’s true net income is what is left after they have set aside tax, NI, and any VAT that was never really theirs. Treating the whole invoice as income is how January goes wrong. If you invoice through an umbrella company you are back on PAYE, and the deductions look much more like the employed example above.
Every UK payslip has to show your gross pay, the amount and type of each deduction, and your net pay. Most also show year-to-date totals, which are the useful ones.
Four checks worth doing once a year, and any month the number surprises you:
If the payslip and your own arithmetic disagree by a few pounds, it is usually rounding or a part-month. If they disagree by a lot, it is normally the tax code or a pension change nobody told you about.
The personal allowance is still £12,570 and the higher-rate threshold is still £50,270. Both have been frozen since 2021 and are currently set to stay frozen until April 2028. That freeze is doing quiet work: as wages rise, more of your pay crosses into taxable territory and a larger share of the workforce drifts into the 40% band without anyone announcing a tax rise.
National Insurance rates are unchanged at 8% and 2%. Student loan thresholds moved as they do each April, with Plan 2 now at £29,385 and Plan 1 at £26,900. Plan 5 remains pegged at £25,000.
The change most people actually noticed was administrative. HMRC now issues most tax code notices digitally rather than by post, so a code change can happen without a letter landing on your doormat. If your net pay moved and you cannot explain it, the HMRC app is the first place to look.
If you want the number without doing any of this by hand, the NetPay app works out your take home pay from your actual hours, rate, tax code, pension and student loan plan, including overtime and unsocial hours. Free to download, and it updates as your shifts do.
See your real take-home pay in seconds
NetPay does this maths for every shift, invoice and payslip, automatically.
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Take home pay is the amount that actually lands in your bank account after everything has been deducted from your gross salary. For a UK employee that usually means income tax, National Insurance, pension contributions, and student loan repayments. It is also called net pay, and it is the figure at the bottom right of your payslip.
Start with your gross pay for the period. Subtract any pension contribution taken before tax, then work out income tax on what is left using your personal allowance, then National Insurance on your gross pay, then any student loan repayment. What remains is your take home pay. A calculator does all of this in seconds, but knowing the order helps you spot when a deduction looks wrong.
Variable hours, overtime, unsocial hours enhancements, bonuses, and commission all move your gross pay, and because income tax is calculated cumulatively across the year, a big month can pull extra tax that a quiet month partly gives back. A tax code change, a pension opt-in, or crossing a student loan threshold will also shift the number.
Yes. Take home pay, net pay, and salary after tax all describe the same thing: gross pay minus every deduction. Payslips usually print it as net pay. Gross pay is the headline figure in your contract, and it is not the amount you receive.
Want to see your actual take-home pay?
NetPay UK works out your real net pay after tax, NI, pension and salary sacrifice, for hourly, shift and variable-income workers. Free to download.
Download the app now
A note on financial advice: NetPay UK calculates take-home pay based on official HMRC tax rules. This article reflects rules in force at the time of publication (24 August 2026). Tax rules change. For complex situations, consult a qualified UK accountant or visit gov.uk/income-tax.
