PAYE Tax & National Insurance Calculator UK 2025/26
Enter your gross annual salary and see an instant, detailed breakdown of your income tax, National Insurance, student loan repayments, and pension deductions for 2025/26. Includes Scottish rate support, all student loan plans, and auto-enrolment pension calculations.
How the PAYE System Works in 2025/26
Pay As You Earn (PAYE) is the UK's system for collecting income tax and National Insurance Contributions (NICs) directly from wages and salaries, before employees receive their net pay. Operated by HMRC and administered by employers, PAYE ensures that most employees pay broadly the right amount of tax throughout the year without needing to file a Self Assessment tax return.
Income Tax Rates and Bands 2025/26 (England, Wales & Northern Ireland)
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 – £50,270 | 20% |
| Higher Rate | £50,271 – £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Scottish Income Tax Rates 2025/26
Scotland has had devolved income tax powers since 2017 and sets its own rates and bands for non-savings, non-dividend income. Scottish taxpayers pay income tax under the Scottish rates rather than the UK rates above.
| Band | Taxable Income | Scottish Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter Rate | £12,571 – £15,397 | 19% |
| Basic Rate | £15,398 – £27,491 | 20% |
| Intermediate Rate | £27,492 – £43,662 | 21% |
| Higher Rate | £43,663 – £75,000 | 42% |
| Advanced Rate | £75,001 – £125,140 | 45% |
| Top Rate | Over £125,140 | 48% |
You are a Scottish taxpayer if your main place of residence is in Scotland. This is determined by where you live, not where you work. If you live in Scotland but commute to England, you are a Scottish taxpayer and pay Scottish income tax rates. Your PAYE tax code will begin with an 'S' (e.g., S1257L) to indicate Scottish tax treatment.
National Insurance 2025/26 — Employee Class 1 Contributions
| Earnings Band | Annual Threshold | Employee NI Rate |
|---|---|---|
| Below Primary Threshold | Up to £12,570 | 0% |
| Primary Threshold to Upper Earnings Limit | £12,570 – £50,270 | 12% |
| Above Upper Earnings Limit | Over £50,270 | 2% |
Note that National Insurance is calculated weekly or monthly (not cumulatively over the year like income tax under PAYE). The above annual thresholds are simply the annualised equivalents. NI is not affected by your tax code — it is based purely on your actual earnings in each pay period.
Understanding Tax Codes
Your tax code is used by your employer to calculate how much income tax to deduct from your pay. The most common tax codes and their meanings:
| Tax Code | Meaning | Who Gets It |
|---|---|---|
| 1257L | Standard personal allowance (£12,570). Most common code. | Majority of employees |
| BR | All income taxed at basic rate (20%). No personal allowance applied. | Second jobs, emergency tax |
| D0 | All income taxed at higher rate (40%). | Second jobs where all income is above basic rate |
| D1 | All income taxed at additional rate (45%). | Second jobs where all income is above higher rate |
| NT | No tax deducted. | Specific circumstances approved by HMRC |
| K codes (e.g. K495) | Negative allowance — additional tax deducted. Used where taxable benefits exceed personal allowance. | High-value company car / private medical benefits |
| S prefix (e.g. S1257L) | Scottish taxpayer — Scottish rates applied. | Scottish residents |
| C prefix (e.g. C1257L) | Welsh taxpayer — Welsh rates applied (currently same as UK rates for 2025/26). | Welsh residents |
| M suffix | Marriage Allowance received — 10% of partner's allowance transferred to you. | Lower earner receiving transfer |
| N suffix | Marriage Allowance transferred — 10% of your allowance given to partner. | Transferring 10% of personal allowance |
Personal Allowance Tapering Above £100,000
The standard personal allowance of £12,570 is progressively reduced for taxpayers with income over £100,000. For every £2 of income above £100,000, the personal allowance is reduced by £1. This means the personal allowance is fully withdrawn at £125,140, creating an effective 60% marginal tax rate on income between £100,000 and £125,140 (40% income tax + 20% effective rate from lost personal allowance). This is one of the most significant — and often overlooked — features of the UK tax system.
If your income approaches £100,000, consider whether you can make pension contributions to bring adjusted net income below the threshold. Pension contributions under a net pay arrangement or salary sacrifice reduce your adjusted net income, potentially restoring some or all of your personal allowance and reducing your effective marginal rate significantly. A £10,000 pension contribution at £110,000 salary could save £4,000 in income tax by restoring the personal allowance.
Student Loan Repayments 2025/26
| Plan | Annual Repayment Threshold | Repayment Rate | Who Has This |
|---|---|---|---|
| Plan 1 | £24,990 | 9% above threshold | Pre-September 2012 starters (England/Wales) or Northern Ireland starters |
| Plan 2 | £27,295 | 9% above threshold | Post-September 2012 starters (England/Wales) |
| Plan 4 | £31,395 | 9% above threshold | Scottish students |
| Postgraduate | £21,000 | 6% above threshold | Postgraduate Master's or Doctoral loans |
Student loan repayments are deducted through PAYE alongside income tax and NI, and can run concurrently (e.g., Plan 2 plus Postgraduate Loan). They are not tax-deductible — they are collected separately from income tax and do not reduce your taxable income. Repayments are based on your income, not the outstanding loan balance.
Workplace Pensions and Auto-Enrolment
Under auto-enrolment legislation, all employers must enrol eligible workers into a qualifying workplace pension scheme. In 2025/26, minimum contribution rates are:
- Employee minimum: 5% of qualifying earnings (including tax relief)
- Employer minimum: 3% of qualifying earnings
- Total minimum: 8% of qualifying earnings
Qualifying earnings for auto-enrolment are calculated on earnings between £6,240 and £50,270 per year. Pension contributions can be structured as relief at source, net pay arrangement, or salary sacrifice — each with different tax and NI implications, as reflected in our calculator.
Marriage Allowance and Blind Person's Allowance
Marriage Allowance allows a non-taxpayer (or basic rate taxpayer) to transfer 10% of their personal allowance (£1,257 in 2025/26) to their spouse or civil partner, reducing the recipient's tax bill by up to £251 per year. Both parties must be basic rate taxpayers — the allowance cannot be transferred if the recipient is a higher rate taxpayer.
Blind Person's Allowance provides an additional tax-free allowance of £3,070 (2025/26) for individuals registered as blind or severely sight-impaired. This is added to the personal allowance, increasing the total tax-free amount to £15,640. Any unused blind person's allowance can be transferred to a spouse or civil partner.
Payslip Rights — What Your Employer Must Provide
Every employee has a statutory right under the Employment Rights Act 1996 (as amended) to receive a written payslip — either on paper or electronically — on or before the date of payment. Since April 2019, this right extended to all workers (not just employees). Your payslip must itemise:
- Gross pay before deductions
- Each variable deduction and the reason for it (e.g., income tax, NI, pension)
- Any fixed deductions (these can be shown as a total if a standing statement of deductions was previously provided)
- Net pay
- If pay varies by time worked: the number of hours worked
You can view and update your tax code through the HMRC Personal Tax Account at tax.service.gov.uk. It is worth checking your code at the start of each tax year, especially if you have changed jobs, taken on a second job, or received employment-related benefits. An incorrect tax code can mean you overpay or underpay tax — both of which HMRC will eventually correct, but it is better to get it right from the start.
Frequently Asked Questions
You may be placed on an emergency tax code (typically 1257L W1 or 1257L M1, sometimes just BR) when you start a new job and your employer does not have your P45 from your previous employer, or when HMRC has not yet updated your code after a change in circumstances. Emergency tax codes treat each pay period in isolation rather than cumulatively, which can result in overpayment. You should provide your P45 to your new employer as soon as possible. If you have overpaid tax, HMRC will usually adjust this automatically at year end, or you can claim a refund by calling HMRC or through your Personal Tax Account.
Most employees with a single source of PAYE income do not need to file a Self Assessment return. However, you must register for Self Assessment if any of the following apply: you earn over £100,000 in the tax year; you have untaxed income exceeding £2,500 (such as rental income or investment income); you are self-employed with profits over £1,000; you or your partner receive Child Benefit and either of you earns over £60,000 (the High Income Child Benefit Charge threshold, which changed from £50,000 on 6 April 2024); you have foreign income; or you are a company director. If in doubt, contact HMRC or use their online checker at gov.uk.
Salary sacrifice is an arrangement where you agree to give up part of your salary in exchange for a non-cash benefit — most commonly employer pension contributions or cycle-to-work scheme equipment. Because the sacrifice reduces your contractual gross pay, both income tax and employee NI are calculated on the lower figure, providing savings on both. Employer NI is also reduced, and many employers share some of this saving with employees. The key advantage over other pension contribution methods is the NI saving (2–12% depending on your earnings band) in addition to the income tax relief. However, salary sacrifice can affect mortgage affordability assessments, statutory pay calculations (SMP, SPP), and entitlement to some means-tested benefits, so consider carefully before entering such an arrangement.
Under a relief at source arrangement, you pay pension contributions from your net (post-tax) pay, and the pension provider claims 20% basic rate tax relief from HMRC directly, adding it to your pension pot. Higher or additional rate taxpayers must claim the additional relief through Self Assessment. Under a net pay arrangement, your pension contribution is deducted from your gross pay before income tax is calculated, so you automatically receive full tax relief at your marginal rate through payroll. For basic rate taxpayers, both methods produce the same result. However, net pay arrangements used to disadvantage non-taxpayers (who received no relief) — legislation from April 2024 introduced a mechanism for HMRC to top up non-taxpayers' pensions in net pay schemes directly.
If you have overpaid income tax under PAYE, HMRC will usually issue a P800 tax calculation after the end of the tax year (typically between June and November). If you are owed a refund, HMRC will either pay it automatically into your bank account (if they have your details) or send a cheque. You can also log into your HMRC Personal Tax Account at tax.service.gov.uk to check your tax position and request a refund directly. Alternatively, if you believe you have significantly overpaid mid-year — for example, after leaving a job — you can contact HMRC directly on 0300 200 3300 to request an in-year repayment. Keep all payslips and P60s as evidence.
Yes. As announced in the October 2024 Autumn Budget, employer (secondary) Class 1 National Insurance contributions increased from 13.8% to 15% from 6 April 2025. Simultaneously, the Secondary Threshold (the point at which employers begin paying NI on employees' earnings) was reduced from £9,100 to £5,000 per year. These changes significantly increased employer payroll costs and led many businesses to adjust employment plans, pay awards, and hiring decisions. The Employment Allowance (which offsets employer NI for eligible small businesses) was simultaneously increased from £5,000 to £10,500 to partially mitigate the impact on smaller employers. These employer NI changes do not directly affect employees' take-home pay, but they do affect the overall cost of employment and may indirectly influence wage negotiations and hiring.