Your Details
Your Payslip Breakdown
Estimates based on HMRC 2025/26 rates. Does not include benefits in kind, overtime or employer-specific deductions.
Understanding Your Payslip
Your payslip shows how your gross salary is split between deductions and take-home pay. Every employee in the UK receives a payslip under the Employment Rights Act 1996, whether on paper or electronically.
Gross Pay
This is your total earnings before any deductions. It includes your basic salary plus any overtime, bonuses, commission or shift allowances. For salaried employees, gross pay is typically your annual salary divided by 12 (monthly) or 52 (weekly).
Income Tax (PAYE)
Your employer deducts income tax through Pay As You Earn (PAYE). The amount depends on your tax code and the rates for the current tax year. For 2025/26, the bands are 20% basic rate (up to £50,270), 40% higher rate (£50,271–£125,140) and 45% additional rate (over £125,140).
National Insurance Contributions
Employee NI is charged at 8% on earnings between £12,570 and £50,270, and 2% above that. NI funds the state pension, NHS and certain benefits. Your employer also pays NI on top of your salary at 15%.
Pension Deductions
If your employer runs a workplace pension (auto-enrolment requires a minimum 5% total, with at least 3% from the employer), your contribution will appear on your payslip. Salary sacrifice pensions reduce your gross pay before tax, giving you extra tax and NI savings.
Student Loan Repayments
If you have a student loan, HMRC will notify your employer to deduct repayments once you earn above the threshold for your plan. Repayments are 9% of income above the threshold (6% for postgraduate loans).
Tax Code Explained
Your tax code tells your employer how much tax-free income you get each pay period. It appears on your payslip and your P45/P60.
How to Read Your Tax Code
The number in the code represents your Personal Allowance divided by 10. For example, 1257L means a £12,570 tax-free allowance. The letter indicates your situation:
- L — Standard Personal Allowance
- M — You received 10% Marriage Allowance transfer from your partner
- N — You transferred 10% of your allowance to your partner
- T — Your code includes other calculations to work out your allowance
- K — You have deductions that exceed your allowance (e.g. benefits in kind)
- BR — All income taxed at basic rate (no allowance, typically for a second job)
- D0 — All income taxed at higher rate
- NT — No tax deducted
Personal Allowance Taper
If your adjusted net income exceeds £100,000, your Personal Allowance is reduced by £1 for every £2 above that threshold. This creates an effective 60% marginal tax rate between £100,000 and £125,140, at which point your allowance is zero.
Worked Examples
Example 1: Office Worker — £28,000
Example 2: Manager — £52,000
Example 3: Senior — £85,000
Frequently Asked Questions
Your employer deducts income tax via PAYE. Your tax code determines your personal allowance, and tax is charged at 20% (basic), 40% (higher) and 45% (additional) on earnings above that allowance. The calculation is cumulative across the tax year so you get the correct total by 5 April.
National Insurance contributions are charged at 8% on earnings between £12,570 and £50,270, and 2% on earnings above £50,270 for 2025/26. NI funds the state pension, NHS, and certain benefits. Your employer also pays NI at 15% on your earnings above £5,000.
Pension contributions made via salary sacrifice reduce your gross pay before tax is calculated, lowering both your income tax and National Insurance. Relief-at-source pensions reduce your taxable income but not NI. This calculator models salary sacrifice. The minimum auto-enrolment total is 8% (at least 3% from your employer).
The number in your tax code (e.g. 1257 in 1257L) is multiplied by 10 to give your tax-free personal allowance (£12,570). The letter indicates your situation: L is the standard code, M or N relate to Marriage Allowance, K means your deductions exceed your allowance, and BR/D0 mean all income is taxed at the basic or higher rate respectively.
Student loan repayments are deducted at 9% of income above the plan threshold. Plan 1: £24,990, Plan 2: £28,470, Plan 4: £31,395. Postgraduate loans are 6% above £21,000. If you have both a Plan 2 and Postgraduate loan, both are deducted simultaneously.
Differences can arise from benefits in kind (company car, health insurance), overtime, bonuses, salary sacrifice schemes, week-1/month-1 basis operation, attachment of earnings orders, or employer-specific deductions not modelled here. This calculator gives an estimate based on standard HMRC rates.