Take-Home Pay Explained: What Gets Deducted From Your Salary
Understand exactly what gets deducted from your UK salary. A clear breakdown of income tax, National Insurance, pension contributions, student loans, and how to calculate your actual take-home pay.
Last updated: February 2026
When you receive a job offer or agree a salary, the number you see isn't what lands in your bank account. Between your gross salary and your take-home pay sit several deductions — some mandatory, some optional. Understanding each one helps you plan your finances accurately and spot opportunities to keep more of what you earn.
The Deduction Stack: What Comes Out of Your Pay
For a typical UK employee, deductions from gross salary happen in this order:
- Pension contributions (if salary sacrifice — deducted before tax)
- Income tax — calculated on your taxable income after personal allowance
- National Insurance — employee contributions at 8% (2025/26)
- Student loan repayments — if applicable, based on your plan type
- Pension contributions (if relief at source — deducted after tax)
Income Tax: The Biggest Deduction
Income tax is calculated in bands. For 2025/26 in England, Wales, and Northern Ireland:
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | £0 – £12,570 | 0% |
| Basic Rate | £12,571 – £50,270 | 20% |
| Higher Rate | £50,271 – £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Scotland has its own rates with 6 bands — see our Scottish tax rates guide.
Your tax code tells your employer how much personal allowance to apply. The most common code is 1257L, which gives you the standard £12,570 tax-free allowance.
National Insurance: The Second Tax
Employee National Insurance contributions for 2025/26:
| Earnings Range | Rate |
|---|---|
| Up to £12,570/year | 0% |
| £12,571 – £50,270/year | 8% |
| Over £50,270/year | 2% |
Unlike income tax, there is no personal allowance for NI — it kicks in at the primary threshold. For more detail, see our National Insurance guide.
Example: £35,000 Salary Breakdown
Here's exactly what happens to a £35,000 salary in 2025/26 (England, no pension, no student loan):
| Component | Annual | Monthly |
|---|---|---|
| Gross Salary | £35,000 | £2,917 |
| Income Tax | -£4,486 | -£374 |
| National Insurance | -£1,794 | -£150 |
| Take-Home Pay | £28,720 | £2,393 |
Your effective tax rate at £35,000 is 17.9% — meaning you keep 82.1p of every pound earned. Use our £35,000 salary page for the complete breakdown, or try any salary in our calculator.
How Pension Contributions Affect Take-Home Pay
Workplace pensions are now mandatory for most employees. The minimum total contribution is 8% of qualifying earnings (5% employee, 3% employer). Many employers offer more generous schemes.
How your pension contribution is deducted matters:
- Salary sacrifice — your gross salary is reduced before tax and NI are calculated. You save on both. See our salary sacrifice guide.
- Relief at source (Net pay) — deducted from your net pay, then the pension provider claims basic rate tax relief from HMRC. You save on income tax but not NI.
A 5% pension contribution on a £35,000 salary (salary sacrifice) reduces your take-home pay by about £1,190/year — but puts £1,750 into your pension. That's a 47% return before any investment growth.
Student Loan Repayments
If you have a student loan, repayments are deducted from your salary above certain thresholds. For 2025/26:
| Plan | Repayment Threshold | Rate |
|---|---|---|
| Plan 1 (pre-2012) | £24,990/year | 9% |
| Plan 2 (post-2012) | £27,295/year | 9% |
| Plan 4 (Scotland) | £27,660/year | 9% |
| Plan 5 (from 2023) | £25,000/year | 9% |
| Postgraduate Loan | £21,000/year | 6% |
For the full breakdown of how student loan repayments work, see our student loan repayment guide.
Other Possible Deductions
- Childcare vouchers — if you joined a scheme before October 2018, up to £243/month can be deducted before tax
- Cycle to Work — monthly deductions for a bicycle purchased through salary sacrifice
- Union subscriptions — deducted from net pay (no tax relief at source)
- Attachment of earnings — court-ordered deductions for debts, child maintenance, or council tax arrears
Understanding Your Payslip
Every payslip should show:
- Gross pay — your salary before any deductions
- Taxable pay — gross pay minus any pre-tax deductions (pension salary sacrifice, etc.)
- Tax paid — income tax deducted this period
- NI paid — National Insurance contributions
- Net pay — what you actually receive
- Year-to-date totals — cumulative figures since 6 April
If the numbers don't match what you expect, check your tax code first — a wrong tax code is the most common cause of unexpected deductions.
Tips to Maximise Your Take-Home Pay
- Check your tax code — ensure you're getting the correct personal allowance. Errors are common, especially if you've changed jobs.
- Claim Marriage Allowance — if your partner earns below £12,570, you could save up to £252/year. See our Marriage Allowance guide.
- Use salary sacrifice for pensions — save NI as well as income tax on contributions.
- Claim work expenses — if you work from home, wear a uniform, or use your own tools, you may be able to claim tax relief.
- Review your student loan plan — make sure you're on the correct plan and not overpaying.
Calculate Your Take-Home Pay
Use our free UK salary calculator to calculate your exact take-home pay for 2025/26. Enter your salary, tax code, pension contributions, and student loan plan to get a precise monthly, weekly, and daily breakdown.
Ready to calculate your take-home pay?
Use our free salary calculator with the latest 2025/26 rates.
Calculate Your Salary