UK Salary Calculator

Employees pay Class 1 National Insurance on earnings:

• 8% on earnings between GBP 242 and GBP 967 a week (GBP 1,048 to GBP 4,189 a month, GBP 12,570 to GBP 50,270 a year)
• 2% on earnings above GBP 967 a week (GBP 4,189 a month)

The self-employed pay Class 4 on profits: 6% between GBP 12,570 and GBP 50,270, and 2% above GBP 50,270. Class 2 contributions may be paid voluntarily to protect a State Pension record where profits are low.

Employer National Insurance is charged separately at rates that depend on the employee’s category letter and does not come out of gross pay.

Above the Upper Earnings Limit — GBP 967 a week, or GBP 50,270 a year — the Class 1 rate drops from 8% to 2%.

The structure reflects that National Insurance builds entitlement to contributory benefits, and that entitlement is capped: earnings above the Upper Earnings Limit do not increase State Pension entitlement, so they attract only the reduced rate.

The practical effect is that the combined marginal rate on earnings actually falls at GBP 50,270 — income tax rises from 20% to 40% while National Insurance drops from 8% to 2%, so the combined rate moves from 28% to 42% rather than to 48%.

No. Class 1 and Class 4 National Insurance stop being due once State Pension age is reached, even where work continues. Income tax continues to apply as normal.

An employer must still pay employer National Insurance on those earnings, but nothing is deducted from the employee’s pay. Proof of age may need to be given to the employer so the deduction stops.

National Insurance is never charged on pension income, whether from the State Pension or a private pension.

Scotland sets its own rates and bands on earned income (employment, self-employment, pensions and property). For 2026-27, with a standard GBP 12,570 Personal Allowance:

• Starter rate — 19%: GBP 12,571 to GBP 16,537
• Basic rate — 20%: GBP 16,538 to GBP 29,526
• Intermediate rate — 21%: GBP 29,527 to GBP 43,662
• Higher rate — 42%: GBP 43,663 to GBP 75,000
• Advanced rate — 45%: GBP 75,001 to GBP 125,140
• Top rate — 48%: over GBP 125,140

Savings interest and dividends stay on UK-wide rates for Scottish taxpayers.

Scottish taxpayer status follows where the main residence is for the majority of the tax year, not where the work is done or where the employer is based.

Someone living in Scotland but commuting to an English employer pays Scottish rates; someone living in England and working in Scotland does not. Where there is more than one home, the test is which was the main residence for the longest part of the year.

HMRC applies the status through an S prefix on the tax code. Keeping an address up to date with HMRC is what keeps the prefix correct.

Income tax rates and bands on earned income are devolved to the Scottish Parliament. National Insurance is not — it is reserved to the UK government and is identical across England, Wales, Scotland and Northern Ireland.

This produces a divergence in the marginal rate. The Scottish higher rate of 42% begins at GBP 43,663, while the National Insurance Upper Earnings Limit stays at GBP 50,270. Between those two points a Scottish taxpayer pays 42% income tax and 8% National Insurance — a combined 50% marginal rate on that slice.

Repayments are a percentage of income above the plan threshold, not of total income:

• Plan 1 — GBP 26,900, repaid at 9%
• Plan 2 — GBP 29,385, repaid at 9%
• Plan 4 (Scotland) — GBP 33,795, repaid at 9%
• Plan 5 (England, courses from Aug 2023) — GBP 25,000, repaid at 9%
• Postgraduate Loan — GBP 21,000, repaid at 6%

An undergraduate plan and a Postgraduate Loan are repaid at the same time, so a borrower with both pays 9% and 6% on the respective amounts above each threshold.

The plan depends on where and when the course was studied, not on the amount borrowed:

• Plan 1 — English or Welsh students starting before September 2012; Northern Irish students
• Plan 2 — English or Welsh students starting between September 2012 and July 2023
• Plan 4 — Scottish students
• Plan 5 — English students starting courses from August 2023

The plan type is shown in a Student Loans Company online account. Repayments are collected through PAYE by the employer, or through Self Assessment for the self-employed.

Contributions to a registered pension attract relief at the marginal rate, delivered one of three ways depending on the scheme:

• Relief at source — the contribution is taken from net pay and the scheme reclaims 20% from HMRC. Higher and additional rate taxpayers claim the remainder through Self Assessment.
• Net pay arrangement — the contribution comes out of gross pay before tax, so full relief is given immediately.
• Salary sacrifice — gross salary is reduced in exchange for an employer contribution, so the amount sacrificed escapes both income tax and National Insurance.

The calculator handles salary sacrifice separately from the other two, because only sacrifice reduces the National Insurance base as well as the taxable amount.

A Gift Aid donation is treated as made net of basic-rate tax, so a charity reclaims 25% on top of the amount given.

Higher and additional rate taxpayers can claim the difference between their rate and the basic rate. The mechanism is an extension of the basic rate band by the grossed-up donation, which moves income out of the higher-rate band. The relief is claimed through Self Assessment or by asking HMRC to adjust a tax code.

The donor must have paid at least as much UK tax in the year as the charity reclaims, otherwise the shortfall becomes payable.

Two separate allowances sit outside the Personal Allowance.

The Personal Savings Allowance covers interest: GBP 1,000 for basic rate taxpayers, GBP 500 for higher rate, and nil for additional rate. Interest inside an ISA is outside the tax system entirely and does not use the allowance.

The Dividend Allowance covers dividend income before dividend rates apply. Dividends above it are charged at their own rates rather than the main income tax rates.

This calculator covers employment, self-employment and pension income, so savings and dividend income are not included in its result.

Most employees taxed entirely through PAYE do not. A return is generally required where, in the tax year, a person:

• was self-employed with gross trading income over GBP 1,000
• was a partner in a business partnership
• had untaxed income — property, savings, dividends, foreign income — that HMRC has not collected through a tax code
• needs to claim higher or additional rate relief on pension contributions or Gift Aid
• is liable to the High Income Child Benefit Charge

Deadlines are 31 October after the tax year ends for a paper return and 31 January for an online return, with the balancing payment also due on 31 January.