Salary Calculator Assumptions and Methodology

This page lists the assumptions behind each calculation. If your result doesn't match your payslip, one of these assumptions is probably the reason.

Tax year and rates

All calculations use HMRC rates and thresholds for 2026/27 (6 April 2026 to 5 April 2027). Rates are updated each April when the new tax year starts.

Personal allowance

The calculator assumes a personal allowance of £12,570 (tax code 1257L) and a single PAYE employment with no adjustments.

Above £100,000, the personal allowance is reduced by £1 for every £2 of income over that threshold. By £125,140 it's gone entirely, creating an effective 60% marginal rate in that band.

Income tax calculation

Income tax is charged on what's left after the personal allowance. The calculator supports two tax regimes:

England, Wales & Northern Ireland – Three bands: basic at 20%, higher at 40%, and additional at 45%.
Scotland – Six bands: starter (19%), basic (20%), intermediate (21%), higher (42%), advanced (45%), and top (48%).

National Insurance

Class 1 employee NI is 8% on earnings between £12,570 and £50,270, then 2% above £50,270.

This calculator works on annual figures. HMRC calculates NI per pay period, so there may be small rounding differences compared to your payslip.

Pension contributions

Pension is off by default. When you set a percentage, it's applied to qualifying earnings between £6,240 and £50,270, matching the auto-enrolment rules.

The pension deduction is applied before income tax. Salary sacrifice is not modelled. If your employer uses salary sacrifice, your actual take-home pay will differ because NI is also reduced.

Student loan repayments

The calculator supports all five UK student loan schemes: Plan 1 (£26,900 threshold), Plan 2 (£29,385), Plan 4 (£33,795), Plan 5 (£25,000), and the postgraduate loan (£21,000).

Repayments are calculated monthly, following PAYE from HMRC:

The annual threshold is divided by 12 and rounded to the nearest whole pound, e.g. £26,065 ÷ 12 = £2,172.
The amount due for repayment is calculated by subtracting the monthly threshold from gross monthly pay.
The repayment rate (9% for undergraduate schemes, 6% for postgraduate) is applied to that amount.
The monthly payment is multiplied by 12 to give the yearly total.

If you hold both an undergraduate and a postgraduate loan, both repayments will be applied at the same time.

Time period conversions

1 year = 12 months, 52 weeks, 260 working days (5 × 52). Hourly rates use the weekly hours you enter. These are standard conventions and may not match every employer's payroll system.

Not included in our calculator

Marriage allowance or blind person's allowance.
Gift Aid donations (which can extend the basic-rate band for higher-rate taxpayers).
Benefits in kind or company car tax.
Salary sacrifice arrangements.
Share schemes (SIP, SAYE, EMI, CSOP).
Tax relief on professional subscriptions or flat-rate expenses.
Child benefit high-income charge.
Non-standard tax codes (BR, D0, NT, K codes).
Multiple employments or director's NI.

Validation and accuracy

Results are checked against HMRC published examples and other calculators. Small differences (usually under £1/month) can occur because of rounding. Treat the output as an estimate, not a definitive payroll figure.

When rates are updated

Rates and thresholds are updated after HMRC confirms the figures for each new tax year, usually following the Autumn Budget or Spring Statement. The new tax year starts on 6 April.