Salary Calculator UK – 2025/26 Take-Home Pay

UK Income Tax Rates and Bands for 2025/26

Income tax bands decide what rate of tax is applied to each part of your taxable income. That is because the UK tax system is progressive, implying that various parts of your income are taxed with varying rates.

What Counts as Taxable Income in the UK?

Taxable income includes but is not limited to:

• Salaries and wages
• Profits from self-employment
• Rental income
• Interest from savings
• Dividends (subject to separate tax bands)

UK Tax Codes and Your Personal Allowance

The majority of people throughout the UK will be given the standard tax code of 1257L.

• •This code allows a Personal Allowance of £12,570 that is the earnest meaning that no tax is payable with regard to the first £12,570 of income.
• •If you happen to have a different tax code, it means that your allowance might be set higher or lower.
• •This can be checked either on your payslip or P60, or you can always call upon HMRC.

Income Tax Bands: England, Wales, & Northern Ireland

If your tax code is 1257L standard:

If your tax code is different (post-allowance thresholds):

Income Tax Bands – Scotland

Scotland has different tax bands for earned income including salary, wages, and self-employment. Income from savings and dividends are taxed under UK-wide rates.

If your tax code is really 1257L standard:

If your tax code is different (post-allowance thresholds):

Some Other Notes

• •The Allowance is Reduced: The £12,570 allowance starts to be reduced once the income is above £100,000 and completely disappears at £125,140.
• •Savings & Dividends: They are taxed under their own rules and so the above bands do not apply.
• •Tax Code Correctness: Your tax code tells you the amount of income tax-free you get. If it's wrong, you could end up paying either too much or too little tax.

National Insurance Contributions (NICs)

National Insurance helps to provide state benefits and the NHS. Employed people need to pay Class 1 NICs:

• •No NICs: Earnings up to £12,570 per year
• •Main rate: 12% on earnings between £12,571 and £50,270
• •Further: 2% on earnings above £50,270

Student Loan Repayments

Student loan repayments are calculated based on your income above a threshold. The current plans are:

• •Plan 1: 9% of income above £22,015 (Northern Ireland and Scotland pre-2012)
• •Plan 2: 9% of income above £27,295 (England and Wales post-2012)
• •Plan 4: 9% of income above £27,660 (Scotland post-2012)
• •Postgraduate Loan: 6% of income above £21,000

Pension Contributions

Pension contributions offer tax advantages and help secure your future. Key points include:

• •Net Pay Arrangement: Contributions are deducted before tax and full relief is obtained immediately
• •Relief at Source: Contributions are deducted after tax and basic rate relief is added automatically
• •Auto-enrolment minimum: A total of 8% (3% employer, 5% employee) of qualifying earnings

Understanding Your UK Tax Code for 2025/26

A tax code is a combination of numbers and letters that Her Majesty's Revenue and Customs (HMRC) uses to inform your employer or pension provider as to how much Income Tax is to be deducted from your income. Your tax code helps to ensure that you are paying the correct amount of tax.

What Do the Numbers Mean?

The numbers represent tax-free income a taxpayer is allowed in a year (Personal Allowance). For the allowance, multiply the number by 10.

Example: The tax code 1257L implies that the Personal Allowance is £12,570 (1257 × 10).

Should you take benefits from your employer (like a company car) or other untaxed income, HMRC may reduce your allowance, affecting the number in your code.

What Do the Letters Mean?

The letters provide further information about your tax situation:

• •L — You are entitled to the standard tax-free Personal Allowance.
• •M — You have received 10 percent of your partner's Personal Allowance (Marriage Allowance).
• •N — You have transferred 10 percent of your Personal Allowance to your partner.
• •T — Your Personal Allowance includes other calculations (e.g.: income over £100,000).
• •0T — You have used up your allowance, or your employer does not have enough information.
• •BR — All your income is taxed at the basic rate (often this is for second jobs).
• •D0 — All your income is taxed at the higher rate.
• •D1 — All your income is taxed at the additional rate.
• •NT — No tax is deducted from this income.
• •S — Your income is taxed using Scottish tax bands.

K codes come into use when your deductions (such as cost or expenses) are greater than your allowance. The number shows how much is added to your income before tax is calculated.

Emergency Tax Codes: What You Need to Know

If you see W1, M1, or X at the end of your code, it means you're on an emergency tax code. This normally happens if HMRC hasn't received complete details of your income, say when you start a new job. Emergency codes are just temporary.

How to Find Your UK Tax Code

Your tax code appears on your:

• Payslip
• P60 or P45
• Tax Code Notice letter from HMRC
• HMRC online Personal Tax Account

Why Your Tax Code Might Change

Your tax code can change for many reasons:

• You start or quit a job
• You start receiving benefits from the state or your company
• Your income changes
• You start or stop claiming Marriage Allowance

HMRC will let you know when your tax code changes, but you should also check from time to time to check the code is still correct for you.

For official guidance, visit: https://www.gov.uk/tax-codes

Salary Sacrifice: Tax Benefits and How It Works

Salary sacrifice helps reduce taxes and national insurance contribution owing:

• •Common schemes: Pension contributions, childcare vouchers, cycle-to-work
• •Tax advantages: Include lowering taxable income and NICs payments
• •Important: It could affect applications for a mortgage and statutory benefits