Tax and NI Calculator
Estimating your take-home pay means subtracting Income Tax and National Insurance (NI) from your gross salary. A tax and NI calculator uses current HMRC rates and thresholds to instantly determine your net income, helping you budget accurately whether you are evaluating a job offer or checking a payslip.
How is Income Tax calculated?
Income Tax applies to your taxable earnings above the Personal Allowance. In the 2026/27 tax year, the standard Personal Allowance is £12,570. Earnings below this threshold are tax-free. Income above this limit falls into specific tax bands:
- Basic rate (20%): £12,571 to £50,270
- Higher rate (40%): £50,271 to £125,140
- Additional rate (45%): Over £125,140
If your income exceeds £100,000, the Personal Allowance shrinks by £1 for every £2 earned above that limit, creating a 60% marginal tax rate between £100,000 and £125,140.
How are National Insurance contributions calculated?
National Insurance funds state benefits and the state pension. For most employees, Class 1 NI is calculated on gross earnings. For the 2026/27 tax year, the primary thresholds are:
- 0%: Earnings up to £12,570 (Primary Threshold)
- 8%: Earnings between £12,571 and £50,270 (Upper Earnings Limit)
- 2%: Earnings above £50,270
Unlike Income Tax, NI does not have a Personal Allowance taper for high earners, but the 2% rate above the Upper Earnings Limit limits the impact on higher salaries.
What else reduces your gross salary?
While Income Tax and NI are the largest statutory deductions, other factors alter your final take-home pay:
- Pension contributions: Auto-enrolment requires a minimum 8% contribution (5% employee, 3% employer). Salary sacrifice schemes reduce both your taxable pay and NI.
- Student loans: Repayments trigger at different thresholds depending on your plan type (Plan 1, Plan 2, Plan 4, or Postgraduate).
- Student loan thresholds: Plan 2 repayments begin at £27,295, while Plan 4 starts at £27,660.
Why use a tax and NI calculator?
Manual calculations across multiple bands and tapering allowances are prone to error. The calculator above applies the 2026/27 thresholds precisely, showing your monthly and annual deductions. This is critical for comparing salary offers, understanding a promotion’s actual value, or verifying that your employer’s payroll deductions match HMRC rules.
Tax rates and thresholds are subject to change. Always verify current rates with HMRC.