TL;DR
In 2026/27, the UK personal allowance is 12,570 pounds. Income tax is 20 percent on earnings from 12,571 to 50,270 pounds, 40 percent from 50,271 to 125,140 pounds, and 45 percent above that. Employee National Insurance (Class 1) is 8 percent on earnings between 12,570 and 50,270 pounds, and 2 percent above. A 30,000 pound salary produces approximately 24,000 pounds take-home after tax and NI, before pension deductions.
Last reviewed: June 2026
Understanding how much of your salary you actually take home after income tax, National Insurance and pension contributions requires knowing the current rates and thresholds. This guide covers all the key 2026/27 figures, worked examples for common salary levels, how hourly wages convert to annual salaries, and what to check if your payslip does not match expectations.
KEY RATES 2026/27
- Personal allowance: 12,570 pounds (frozen until 2028).
- Basic rate income tax: 20% on 12,571 to 50,270 pounds.
- Higher rate income tax: 40% on 50,271 to 125,140 pounds.
- Additional rate income tax: 45% above 125,140 pounds.
- Employee NI (Class 1): 8% on 12,570 to 50,270 pounds; 2% above.
- National Living Wage (aged 21+): 12.21 pounds per hour.
Income tax rates and bands 2026/27
Income tax in the UK is charged on taxable income above the personal allowance. For 2026/27 the personal allowance is 12,570 pounds, meaning the first 12,570 pounds of earnings are tax-free. The allowance has been frozen at this level since 2021/22 and is scheduled to remain frozen until at least 2027/28, a policy known as fiscal drag: as wages rise with inflation, more earnings fall into taxable bands even though thresholds have not moved.
The basic rate of 20 percent applies to taxable income between 12,571 and 50,270 pounds. This band covers the majority of UK earners. The higher rate of 40 percent applies to income between 50,271 and 125,140 pounds. The additional rate of 45 percent applies to income above 125,140 pounds.
For incomes between 100,000 and 125,140 pounds, the personal allowance is tapered away at a rate of 1 pound for every 2 pounds earned above 100,000 pounds. This creates an effective marginal tax rate of 60 percent in this band: every additional pound earned above 100,000 pounds results in 40p in higher-rate tax plus a further 20p loss of personal allowance relief. Salary sacrifice into a pension can reduce adjusted net income below 100,000 pounds and restore the personal allowance.
National Insurance rates 2026/27
Employee National Insurance (Class 1 primary contributions) is charged on earnings above the primary threshold of 12,570 pounds per year (1,048 pounds per month). The main rate is 8 percent on earnings between 12,570 and 50,270 pounds per year. Above 50,270 pounds, NI falls to 2 percent on additional earnings.
There is no upper ceiling on NI contributions in the sense that earnings above 50,270 pounds still attract the 2 percent rate, but the combined tax and NI burden above this threshold is 40 percent income tax plus 2 percent NI = 42 percent, compared to 20 percent tax plus 8 percent NI = 28 percent for basic rate earners.
Employer NI (Class 1 secondary contributions) is paid by the employer at 15 percent on employee earnings above 5,000 pounds per year (the secondary threshold for 2026/27). Employer NI is a cost to the employer, not deducted from employee pay, though it affects the total employment cost of a role.
Worked examples: take-home pay at key salary levels
At 20,000 pounds gross salary: taxable income is 20,000 minus 12,570 = 7,430 pounds. Income tax at 20 percent = 1,486 pounds. NI at 8 percent on 7,430 pounds (20,000 minus 12,570) = 594 pounds. Total deductions: 2,080 pounds. Take-home: approximately 17,920 pounds per year or 1,493 pounds per month.
At 30,000 pounds gross salary: taxable income is 17,430 pounds. Income tax at 20 percent = 3,486 pounds. NI at 8 percent on 17,430 pounds = 1,394 pounds. Total deductions: 4,880 pounds. Take-home: approximately 25,120 pounds per year or 2,093 pounds per month.
At 50,000 pounds gross salary: taxable income is 37,430 pounds (all basic rate). Income tax = 7,486 pounds. NI at 8 percent on 37,430 pounds = 2,994 pounds (plus 2 percent on the portion above 50,270 is nil at exactly 50,000). Total deductions: 10,480 pounds. Take-home: approximately 39,520 pounds per year or 3,293 pounds per month.
At 60,000 pounds gross salary: taxable income is 47,430 pounds. Basic rate tax on 37,700 pounds (12,571 to 50,270) = 7,540 pounds. Higher rate tax on 9,730 pounds (50,271 to 60,000) = 3,892 pounds. NI at 8 percent on 37,700 = 3,016 pounds; 2 percent on 9,730 = 195 pounds. Total deductions: 14,643 pounds. Take-home: approximately 45,357 pounds per year or 3,780 pounds per month.
These figures exclude pension contributions (which reduce taxable income) and student loan repayments, and assume the standard personal allowance with no tax code adjustments.
How pension contributions affect take-home pay
Contributions to a pension reduce the income on which tax and NI are calculated if made via salary sacrifice. Under salary sacrifice, the employee gives up a portion of their gross salary in exchange for an employer pension contribution of the same amount. This reduces the employee's taxable pay and their NI liability, as well as the employer's NI bill.
For a basic-rate taxpayer contributing 5 percent of a 30,000 pound salary (1,500 pounds) via salary sacrifice: taxable salary falls to 28,500 pounds, reducing income tax by 300 pounds and NI by 120 pounds. The effective cost of the 1,500 pound pension contribution is 1,080 pounds (1,500 minus 300 tax minus 120 NI). The employer also saves on their own NI bill.
Relief at source is an alternative method where contributions are paid from net pay and the pension provider claims basic-rate tax relief at 20 percent directly from HMRC. Higher-rate and additional-rate taxpayers can claim the additional relief through self-assessment. Relief at source does not reduce the NI bill in the same way as salary sacrifice.
Converting hourly wage to annual salary
To convert an hourly rate to an annual gross salary, multiply the hourly rate by the number of hours worked per week, then multiply by 52. For example: 15 pounds per hour x 37.5 hours per week x 52 weeks = 29,250 pounds per year.
For a 40-hour week: 15 pounds x 40 x 52 = 31,200 pounds. For a part-time 20-hour week: 15 pounds x 20 x 52 = 15,600 pounds. Note that this gives gross annual salary before tax and NI. The take-home calculation then applies as above.
The national living wage for workers aged 21 and over is 12.21 pounds per hour in 2026/27. On a standard 37.5-hour week, this produces an annual gross salary of 12.21 x 37.5 x 52 = 23,810 pounds. After income tax of 2,248 pounds and NI of 895 pounds, take-home is approximately 20,667 pounds per year or 1,722 pounds per month.
Student loan repayments
Student loan repayments are collected via the payroll in the same way as income tax and NI. The repayment rate and threshold depend on the plan type. Plan 2 (most graduates who started after 2012) repay 9 percent of earnings above 27,295 pounds per year. Plan 5 (new loans from August 2023) repay 9 percent above 25,000 pounds. Plan 1 repayments are 9 percent above 24,990 pounds. Postgraduate loans repay at 6 percent above 21,000 pounds.
On a 30,000 pound salary, Plan 2 repayments are 9 percent of (30,000 minus 27,295) = 9 percent of 2,705 = 243 pounds per year. This is deducted via PAYE in addition to income tax and NI, further reducing take-home pay. Multiple loan types can be in repayment simultaneously.
Checking your tax code
Your tax code determines how much tax-free income you receive each year. The standard code for 2026/27 is 1257L, representing the 12,570 pound personal allowance (1,257 x 10). If your tax code differs, it may reflect adjustments for benefits in kind, underpaid tax from prior years, or other income sources.
If your tax code is lower than 1257L (for example 900L), you are receiving a smaller personal allowance and paying more tax. If it is higher (for example 1357L), you have an enhanced allowance, perhaps due to work expenses or the marriage allowance. Check your tax code on your payslip, P60 or via the HMRC Personal Tax Account at gov.uk/personal-tax-account.
Frequently asked questions
How much tax do I pay on a 30,000 pound salary?
On a 30,000 pound salary in 2026/27, income tax is 3,486 pounds (20 percent on 17,430 pounds of taxable income). National Insurance is 1,394 pounds (8 percent on 17,430 pounds). Total deductions before pension: approximately 4,880 pounds, leaving take-home of around 25,120 pounds per year.
What is the NI rate in 2026?
Employee Class 1 NI is 8 percent on earnings between 12,570 and 50,270 pounds per year, and 2 percent on earnings above 50,270 pounds. Employer NI is 15 percent on employee earnings above 5,000 pounds per year.
How do I convert hourly pay to an annual salary?
Multiply the hourly rate by weekly hours, then by 52. At 15 pounds per hour for 37.5 hours, this gives 29,250 pounds gross per year before tax and NI.
Does salary sacrifice reduce my take-home pay?
Salary sacrifice reduces your gross pay and therefore reduces income tax and NI deductions. The net reduction in take-home pay is less than the pension contribution itself because you save on tax and NI. For a basic-rate taxpayer, a 100 pound salary sacrifice contribution effectively costs around 72 pounds in take-home pay reduction.
UK salary take-home calculator 2026/27
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