Frequently asked questions
How is take-home pay worked out?
Your employer takes income tax, National Insurance, any student loan and usually a pension contribution before paying you. For 2026/27 the first £12,570 is tax-free, then 20% up to £50,270, 40% up to £125,140 and 45% above (Scotland has its own six bands). Employee NI is 8% between £12,570 and £50,270 and 2% above.
Why is my tax higher between £100,000 and £125,140?
You lose £1 of your £12,570 personal allowance for every £2 you earn over £100,000. That creates an effective 60% tax rate in this band (plus NI). Paying more into a pension can bring your income back under £100,000.
Does salary sacrifice save National Insurance?
Yes. With salary sacrifice your salary is reduced before both tax and NI, so you save 8% NI as well (2% above £50,270). With a net pay arrangement you get tax relief but still pay NI on the full salary.
Is this exact?
It's an annual estimate for the 2026/27 tax year using the standard 1257L tax code. Your payslip can differ if you have a different tax code, benefits in kind, bonuses or irregular pay. Check gov.uk or your payslip.