PAYE (Pay As You Earn) is the UK's automatic income tax and National Insurance withholding system. Calculate your monthly and annual deductions from gross salary.
Quick answer. PAYE (Pay As You Earn) is the UK's automatic income tax and National Insurance withholding system. Calculate your monthly and annual deductions from gross salary.
Interactive calculator
UK PAYE income tax calculator
2024-25 income tax for England, Wales, and Northern Ireland. Models the personal-allowance taper above 100,000 GBP.
Personal allowance-
Total income tax-
Net annual pay-
Effective rate-
How is this calculated?
HMRC PAYE 2024-25: personal allowance 12,570; basic 20% to 50,270; higher 40% to 125,140; additional 45% above. Personal allowance reduces by 1 GBP for every 2 GBP of income above 100,000 (the 60% effective trap).
Source: HMRC PAYE Tax Tables 2024-25.
About this calculator
PAYE (Pay As You Earn) is the UK's automatic withholding system for income tax and National Insurance contributions. This calculator applies the 2026/27 personal allowance, income tax bands, and the personal-allowance taper above 100,000 pounds to estimate annual income tax and take-home pay for England, Wales, and Northern Ireland.
The 2026/27 tax year runs 6 April 2026 to 5 April 2027. Thresholds are frozen at 2024/25 levels through April 2028 under the policy first announced in the 2021 Budget and extended by successive Chancellors – meaning each year of wage inflation pulls more workers into higher bands through fiscal drag. The OBR estimates this freeze will create an additional 2.1 million higher-rate taxpayers by 2027 vs an inflation-indexed baseline. For Scottish taxpayers, this calculator does NOT apply: Scotland's Starter (19%), Basic (20%), Intermediate (21%), Higher (42%), Advanced (45%), and Top (48%) bands diverge significantly and are set by the Scottish Parliament, not Westminster.
How it works
Personal allowance (PA) = 12,570 - max(0, (gross - 100,000) / 2)
Taxable income = max(0, gross - PA)
Income tax = 20% on first 37,700 + 40% above to 125,140 + 45% above
Take-home = gross - income tax - NI - student loan
Personal allowance = 12,570 pounds in 2026/27, tapering away above 100,000 pounds at 50p per pound.
Basic rate = 20 percent on the first 37,700 of taxable income (so up to 50,270 gross).
Higher rate = 40 percent from 50,270 to 125,140 gross.
Additional rate = 45 percent above 125,140.
NI 2026/27 = employee 8 percent on 12,570 to 50,270, 2 percent above.
Worked example (60,000 pound salary, 2026/27, code 1257L)
Personal allowance = 12,570 (no taper, gross under 100,000).
Taxable income = 60,000 - 12,570 = 47,430.
20% on first 37,700 = 7,540.
40% on remaining 9,730 = 3,892.
Total income tax = 11,432 pounds.
National Insurance = 8% on (50,270 - 12,570 = 37,700) + 2% on (60,000 - 50,270 = 9,730) = 3,016 + 194.60 = 3,211.
Take-home = 60,000 - 11,432 - 3,211 = 45,357 per year, 3,780 per month.
Result: ~45,360 pounds take-home on a 60,000 salary. Effective income tax rate is 19.1 percent; combined tax + NI rate is 24.4 percent. Salary sacrifice into pension would cut both layers.
Reference: 2026/27 UK PAYE bands (England, Wales, NI)
Band
Income range
Income tax
NI (employee)
Personal allowance
0 to 12,570
0%
0%
Basic rate
12,570 to 50,270
20%
8%
Higher rate
50,270 to 100,000
40%
2%
PA taper zone
100,000 to 125,140
40% + PA loss = 60% effective
2%
Additional rate
over 125,140
45%
2%
Child Benefit HICBC
60,000 to 80,000
1% of CB clawback per 200 pounds over 60K
n/a
Annual allowance taper
260,000 to 360,000
Pension AA tapers from 60K to 10K
n/a
Scotland uses different income tax bands (Starter, Basic, Intermediate, Higher, Top) with rates 19 to 48 percent. NI is UK-wide.
Common mistakes
Ignoring the 60 percent trap. Between 100,000 and 125,140 pounds, every extra pound costs 60p in tax. Pension salary sacrifice is the standard fix.
Using Scottish bands by mistake. Scotland's bands differ; PAYE codes prefix with S (e.g., S1257L). This calculator covers rUK.
Forgetting student loan deduction. Plans 1 to 5 and Postgraduate each have separate thresholds and 9 to 6 percent rates above them.
Missing the marriage allowance. A non-taxpayer spouse can transfer 1,260 pounds of personal allowance to a basic-rate partner, worth up to 252 pounds per year.
Treating bonus as taxed differently. Bonuses go through PAYE at marginal rate the month received; the year-end true-up balances any over- or under-withholding.
Confusing tax year boundaries. UK tax year is 6 April to 5 April, not calendar year.
Pay As You Earn is the UK's automatic withholding system for income tax and National Insurance. Your employer deducts both each pay period using your HMRC-issued tax code, then pays HMRC monthly. About 30 million UK workers are on PAYE; most never file a Self Assessment.
What is tax code 1257L?+
The standard 2026/27 UK tax code, giving the full 12,570 pound personal allowance. The number is the allowance divided by 10; the letter L means a standard personal allowance. Codes like K500 or BR mean reduced or no allowance, often when you have a second job.
Do I need to file Self Assessment with PAYE?+
Usually no if PAYE is your only income. You must file Self Assessment if you have self-employment income above 1,000 pounds, rental income, untaxed savings or dividend income above thresholds, capital gains above the 3,000 pound 2026/27 exemption, or income over 150,000 pounds.
What is the 60 percent effective tax trap?+
Between 100,000 and 125,140 pounds, the personal allowance tapers by 1 pound for every 2 pounds of income. This creates a marginal rate of 60 percent (40 percent higher rate plus 20 percent allowance loss) on that 25,140 pound slice. Salary sacrifice into pension is the standard way to dodge the trap.
How does the High Income Child Benefit Charge work?+
HICBC claws back Child Benefit when the higher earner in a household crosses 60,000 pounds adjusted net income. The charge is 1% of Child Benefit per 200 pounds of income above the threshold, reaching 100% (full clawback) at 80,000 pounds. For a household claiming for two children (around 2,212 pounds Child Benefit in 2026/27), the marginal rate inside the taper zone is effectively 51-52% once you stack income tax, NI, and HICBC. Pension salary sacrifice that brings adjusted net income below 60,000 wipes out the charge.
What if my tax code starts with a K?+
A K code means HMRC has deductions exceeding your personal allowance, so you have negative allowances added back to taxable pay. Common causes: company car/medical benefit-in-kind, prior-year underpayments coded out, or two jobs where the first uses all the allowance. K500 means 5,000 pounds is added to taxable pay each year. Regulation 7 of the PAYE Regs caps the monthly K-code deduction at 50% of pay, so a very large K code may underwithhold and trigger a year-end balancing charge through Self Assessment.
Sources
HMRC Income Tax Rates and Personal Allowances 2026/27.
GOV.UK National Insurance contributions 2026/27 (employee Class 1 thresholds and rates).
HMRC PAYE Tax Tables and tax-code letter reference.
Office for Budget Responsibility (OBR), Economic and Fiscal Outlook, Spring 2026 (frozen threshold analysis).
