Understanding UK Salary, PAYE and National Insurance
A UK payslip can contain several deductions from gross salary. PAYE is the system employers generally use to deduct Income Tax from employment income, while National Insurance contributions are calculated separately.
Some employees also have student loan repayments, pension contributions or other deductions. These can change the amount received in their bank account.
Gross salary vs net salary
Gross salary is the amount earned before applicable deductions. Net salary, commonly called take-home pay, is the amount remaining after deductions.
For example, someone with a £40,000 annual gross salary will not normally receive £40,000 into their bank account because PAYE Income Tax, employee National Insurance and possibly other deductions may apply.
PAYE Income Tax vs National Insurance
| Item | What it covers | Relevant tool |
|---|---|---|
| PAYE Income Tax | Income Tax deducted from employment earnings through payroll. | Salary After Tax |
| Employee National Insurance | Class 1 employee contributions on qualifying earnings. | Employee NI |
| Employer National Insurance | Employer contributions, generally paid in addition to gross wages. | Employer NI |
| Student Loan Repayments | Repayments calculated under the applicable loan plan. | Student Loans |
Why is Scottish take-home pay different?
Scottish taxpayers have different Income Tax rates and bands for non-savings, non-dividend income, including employment income.
Employee National Insurance is generally governed by UK-wide rules, but Scottish Income Tax can make the overall take-home salary different from an otherwise comparable employee in England, Wales or Northern Ireland.
Use the Scotland Salary After Tax Calculator when the Scottish Income Tax rules apply.
How student loan repayments affect take-home pay
Student loan repayments are generally calculated on earnings above the relevant repayment threshold. Different plans can have different thresholds and repayment percentages.
Payroll deductions may vary with the pay period and earnings received. A simple annual estimate may not exactly match every individual payslip.
National Minimum Wage and National Living Wage
UK minimum wage rules establish statutory hourly pay rates for eligible workers. The applicable rate can depend on age and apprentice status.
Actual minimum wage compliance can involve additional rules about working time, pay reference periods, deductions and accommodation offsets.
The minimum wage calculator provides a useful estimate but cannot independently establish an employer's legal compliance.
Understanding statutory sick, maternity and paternity pay
Statutory Sick Pay, Statutory Maternity Pay and Statutory Paternity Pay are different employment payment schemes. Each has its own eligibility, earnings and payment rules.
The relevant calculator can help estimate a payment, but entitlement should be confirmed using the official guidance and the employee's circumstances.
How to use these UK salary calculators
- Choose the calculator for your salary, deduction or payment type.
- Check whether the tool is designed for the 2026/27 tax year.
- Enter your gross pay, working hours or other required inputs.
- Review the assumptions and the estimated result.
- Compare the estimate with your payslip, payroll records or official guidance.
Official UK payroll and employment guidance
For authoritative information about current tax thresholds, National Insurance, minimum wage and statutory payments, see:
- GOV.UK – Income Tax rates and allowances
- GOV.UK – National Insurance rates and categories
- GOV.UK – National Minimum Wage rates
- GOV.UK – Student loan repayments
- GOV.UK – Statutory Sick Pay
- GOV.UK – Statutory Maternity Pay
- GOV.UK – Statutory Paternity Pay
Frequently asked questions
How do I calculate my UK salary after tax?
Start with gross salary, estimate Income Tax and employee National Insurance, then account for any additional deductions such as student loans or pension contributions.
Is PAYE the same as National Insurance?
No. PAYE is the payroll system used to collect Income Tax, while National Insurance contributions are a separate deduction.
Does Scotland have different Income Tax rates?
Yes. Scottish taxpayers have different bands and rates for certain types of income, including employment income.
Does employer National Insurance reduce my salary?
Employer National Insurance is generally an employer cost rather than a deduction from an employee's stated gross salary.
Are student loan repayments deducted before Income Tax?
Student loan repayments are calculated using the relevant earnings rules and are separate from PAYE Income Tax.
Does minimum wage depend on age?
Yes. UK statutory minimum wage rates can vary by age and apprentice status.
Are statutory sick and maternity pay calculated the same way?
No. The schemes have different eligibility requirements, payment periods and calculation methods.
Are these calculators official HMRC tools?
No. CalculatorsOnline is an independent website and is not affiliated with HMRC or the UK Government.
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