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UK Payslip Calculator 2025/26

Generate a detailed payslip breakdown showing your gross pay, income tax, National Insurance, student loan deductions, pension contributions, and year-to-date totals. Updated for the 2025/26 tax year.

How to Read Your Payslip

Your payslip is one of the most important financial documents you receive. It is provided by your employer each time you are paid and details exactly how your gross salary is broken down into deductions and net pay. Understanding your payslip ensures you are paying the correct amount of tax and helps you spot errors that could cost you money.

A standard UK payslip contains several key sections. At the top, you will find your personal details, including your name, employee number, National Insurance number, and tax code. The tax code is particularly important as it determines how much of your income is tax-free. The most common tax code for 2025/26 is 1257L, which corresponds to a personal allowance of £12,570.

The payments section shows your gross pay for the period. This is your total earnings before any deductions and includes your basic salary, plus any overtime, bonuses, commission, or other taxable benefits. If you are paid monthly, this will be one-twelfth of your annual salary. If you are paid weekly, it will be one-fifty-second.

The deductions section lists everything that is taken from your gross pay before you receive your net pay. The main statutory deductions are income tax and National Insurance. You may also see student loan repayments, pension contributions, attachment of earnings orders, or other voluntary deductions such as cycle-to-work scheme payments or charitable giving through payroll.

At the bottom of your payslip, you will find your net pay. This is the amount that is actually transferred to your bank account. Many payslips also show year-to-date (YTD) figures, which are cumulative totals from the start of the tax year on 6 April. These are used by HMRC's cumulative PAYE system to ensure you pay the correct amount of tax across the year.

Tax Codes Explained

Your tax code is issued by HMRC and tells your employer how much tax-free income to allocate to you. It is made up of a number and a letter (or just letters for certain codes). Understanding what your tax code means is essential for checking your payslip is correct.

The number in your tax code represents your tax-free allowance. To find your allowance, multiply the number by 10 and add 9. For example, the code 1257L gives a tax-free allowance of 1257 x 10 + 9 = £12,579 (which HMRC rounds to £12,570 for the standard personal allowance calculation). Your employer divides this allowance across your pay periods, so each month you receive one-twelfth of your annual allowance tax-free.

The letter in your tax code indicates your situation:

  • L — You are entitled to the standard personal allowance. This is the most common suffix.
  • M — You have received a transfer of 10% of your partner's personal allowance through the Marriage Allowance.
  • N — You have transferred 10% of your personal allowance to your partner.
  • T — Your tax code includes other calculations to work out your personal allowance.
  • S — Your income or pension is taxed using Scottish income tax rates.
  • C — Your income or pension is taxed using Welsh income tax rates.

Some tax codes consist of letters only and apply special rules:

  • BR — All your income from this source is taxed at the basic rate of 20%. This is commonly used for second jobs where your personal allowance has already been applied by your main employer.
  • D0 — All income is taxed at the higher rate of 40%.
  • D1 — All income is taxed at the additional rate of 45%.
  • NT — No tax is deducted from this income.

K codes are special. They appear when the value of your tax-free allowances is less than the total of deductions due, for example if you receive substantial benefits in kind. A K code adds income to your taxable pay rather than reducing it. For example, K100 means £1,009 is added to your taxable income each year. However, the maximum tax deducted through a K code cannot exceed 50% of your gross pay in any pay period.

Payslip Deductions Explained

Each deduction on your payslip is calculated according to specific rules. Understanding how each one works helps you verify your payslip is correct and identify opportunities to reduce your tax burden legitimately.

Income Tax

Income tax is calculated using the PAYE (Pay As You Earn) system. Your employer calculates the tax due based on your cumulative earnings and your tax code. For 2025/26, the income tax rates for England, Wales, and Northern Ireland are:

BandTaxable IncomeTax Rate
Personal AllowanceUp to £12,5700%
Basic Rate£12,571 to £50,27020%
Higher Rate£50,271 to £125,14040%
Additional RateOver £125,14045%

On a monthly payslip, HMRC uses the cumulative method. Your employer calculates the tax due on your total earnings since 6 April, subtracts the tax already paid in previous months, and deducts the difference. This means if you receive a bonus in one month that pushes you into a higher tax bracket, the additional tax is collected that month. If your income drops in a later month, you may receive a tax refund through payroll.

National Insurance Contributions

Employee National Insurance contributions for 2025/26 are calculated on a non-cumulative basis, meaning each pay period is calculated independently. The rates are:

Earnings per MonthEmployee NI Rate
Up to £1,048 (Primary Threshold)0%
£1,048 to £4,189 (Upper Earnings Limit)8%
Over £4,1892%

Unlike income tax, NI does not use the cumulative method. Each pay period is calculated in isolation, which means there is no catch-up mechanism. If you earn above the Upper Earnings Limit in one month and below it in another, the NI is simply calculated separately for each month. This can result in slight differences between dividing the annual NI figure by 12 and the actual monthly deductions.

Student Loan Repayments

Student loan repayments are deducted from your salary once you earn above the relevant threshold for your plan type. The thresholds for 2025/26 are:

PlanMonthly ThresholdRepayment Rate
Plan 1£2,0829%
Plan 2£2,2749%
Plan 4£2,6169%
Plan 5£2,0839%
Postgraduate£1,7506%

Student loan deductions are calculated on your gross earnings above the threshold. They do not reduce your taxable income. Your employer will have a student loan start notice (SL1 or SL2) from HMRC telling them which plan type to use and when to start deducting. Once your loan is fully repaid, HMRC will issue a stop notice to your employer.

Pension Contributions

Pension contributions on your payslip depend on the type of scheme. Under auto-enrolment, the minimum total contribution for 2025/26 is 8% of qualifying earnings (5% from the employee, 3% from the employer), though many employers offer higher contributions. The three main pension arrangements affect your payslip differently:

  • Salary sacrifice: Your contractual pay is reduced before tax and NI, so your payslip shows a lower gross salary. You benefit from savings on both income tax and National Insurance.
  • Net pay: Your pension contribution is deducted from gross pay before income tax is calculated, but NI is still based on your full pay. The contribution appears as a deduction on your payslip.
  • Relief at source: The contribution is taken from your net pay and appears as a deduction after tax. Your pension provider claims 20% basic rate tax relief from HMRC and adds it to your pot. Higher and additional rate taxpayers must claim extra relief through their Self Assessment tax return.

What Changed in April 2025

Several changes from April 2025 affect what appears on your payslip:

  • Employer NI changes: While employer NI does not appear as a deduction on your payslip, the increase from 13.8% to 15% and the reduction in the employer threshold from £9,100 to £5,000 per year has significantly increased the cost of employing you. This may indirectly affect pay rises and bonus decisions.
  • Frozen thresholds: The personal allowance (£12,570), basic rate limit (£37,700), and higher rate threshold (£50,270) all remain frozen. With wages rising, more people are being pushed into higher tax bands, a phenomenon known as fiscal drag. You may notice more tax being deducted from your payslip than in previous years even without a salary increase, simply because the thresholds have not kept pace with inflation.
  • National Living Wage: The National Living Wage increased to £12.21 per hour for workers aged 21 and over. If you are on the minimum wage, your gross pay will be higher on your payslip, though some of this increase will be offset by higher tax and NI deductions.
  • Student loan thresholds: Some student loan repayment thresholds have been adjusted. Check your payslip to ensure the correct plan type and threshold are being used, particularly if you are close to the repayment threshold.

Worked Examples

Example 1: Monthly Payslip on £28,000

Consider an employee earning £28,000 per year, paid monthly with tax code 1257L, no student loan, and no pension:

  • Gross pay: £28,000 / 12 = £2,333.33
  • Personal allowance per month: £12,570 / 12 = £1,047.50
  • Taxable pay: £2,333.33 - £1,047.50 = £1,285.83
  • Income tax (20%): £1,285.83 x 0.20 = £257.17
  • Employee NI: (£2,333.33 - £1,047.50) x 0.08 = £102.87
  • Total deductions: £257.17 + £102.87 = £360.04
  • Net pay: £2,333.33 - £360.04 = £1,973.29

The employer also pays NI of (£2,333.33 - £416.67) x 0.138 = £264.50 per month, making the total cost of employing this person £2,597.83 per month.

Example 2: Payslip with Student Loan and Pension

An employee earning £35,000, paid monthly, with a Plan 2 student loan and 5% salary sacrifice pension:

  • Gross pay: £35,000 / 12 = £2,916.67
  • Pension (salary sacrifice): £2,916.67 x 5% = £145.83
  • Adjusted gross for tax: £2,916.67 - £145.83 = £2,770.83
  • Income tax: (£2,770.83 - £1,047.50) x 0.20 = £344.67
  • Employee NI (on adjusted gross): (£2,770.83 - £1,047.50) x 0.08 = £137.87
  • Student loan (Plan 2): (£2,916.67 - £2,274.58) x 0.09 = £57.79
  • Total deductions: £344.67 + £137.87 + £57.79 + £145.83 = £686.16
  • Net pay: £2,916.67 - £686.16 = £2,230.51

Example 3: Higher Rate Taxpayer on £60,000

An employee earning £60,000 per year, paid monthly with tax code 1257L, no student loan or pension:

  • Gross pay: £60,000 / 12 = £5,000.00
  • Income tax: The first £1,047.50 is tax-free. £3,141.67 (basic rate portion) at 20% = £628.33. The remaining £810.83 (higher rate portion) at 40% = £324.33. Total tax: £952.67
  • Employee NI: £3,141.67 at 8% = £251.33, plus £810.83 at 2% = £16.22. Total NI: £267.55
  • Total deductions: £952.67 + £267.55 = £1,220.22
  • Net pay: £5,000.00 - £1,220.22 = £3,779.78

Common Payslip Mistakes

Payroll errors are more common than you might think. Here are the most frequent issues to check for on your payslip:

1. Wrong Tax Code

This is the single most common payslip error. If HMRC issues an incorrect tax code, your employer will apply it without question. Check your tax code at the start of every tax year and whenever you receive a new coding notice. Common causes of wrong codes include benefits in kind not being updated, underpaid tax from previous years being collected through your code, or your personal allowance being reduced when it should not be. You can check and update your tax code through your Personal Tax Account on the HMRC website.

2. Student Loan Deductions After Repayment

There is often a delay between fully repaying your student loan and your employer stopping deductions. The Student Loans Company (SLC) must notify HMRC, who then instruct your employer to stop deducting. This process can take several weeks. If you believe you have overpaid, contact the SLC directly to request a refund. To prevent overpayment, you can switch to Direct Debit for the final months of your loan.

3. Incorrect Pension Contributions

Check that your pension contribution percentage matches what you agreed with your employer. Also verify the scheme type. Salary sacrifice should reduce your gross pay (and therefore your tax and NI), while net pay and relief at source should show the contribution as a separate deduction. If the wrong type is being used, you could be missing out on tax relief.

4. Missing Overtime or Bonus Pay

If you worked overtime or are due a bonus, check that the correct amount appears in your gross pay. Bonuses are subject to the same tax and NI as regular salary. Because the PAYE cumulative method is used for tax, a bonus may be taxed at a higher rate if it pushes your cumulative earnings into a higher tax band for that month. However, this is usually corrected in subsequent months.

5. Not Checking Year-to-Date Totals

YTD totals are a useful check that your tax is on track for the year. By month 6 (September), your YTD tax should be approximately half your expected annual tax. If it is significantly more or less, it could indicate a tax code issue or an error in a previous month that has not been corrected.

Frequently Asked Questions

What is a payslip and what should it show?
A payslip is a document provided by your employer each time you are paid. By law, it must show your gross pay (total earnings before deductions), all deductions such as income tax, National Insurance, student loan repayments and pension contributions, the net pay (take home amount), and the method of payment. Since April 2019, payslips must also show the number of hours worked for employees whose pay varies by hours. Your payslip may also show year-to-date (YTD) totals for tax and NI, your tax code, your NI number, and your employer's details.
What does my tax code mean?
Your tax code tells your employer how much tax-free income you are entitled to in a tax year. The most common code for 2025/26 is 1257L, which means you have a personal allowance of £12,570. The number is multiplied by 10 to give your tax-free amount, and the letter indicates your situation. L means you are entitled to the standard personal allowance. BR means all income is taxed at the basic rate (20%). D0 means all income is taxed at the higher rate (40%). K codes mean you owe more tax than your allowance covers, often due to benefits in kind. NT means no tax is deducted. If your tax code is wrong, you could be paying too much or too little tax.
Why is my payslip different from an annual salary calculator?
A payslip calculator shows your deductions for a single pay period (monthly, weekly, or 4-weekly), whereas an annual salary calculator shows the full year at once. Because of rounding in the cumulative PAYE system, your monthly payslip figures may not exactly divide into the annual totals. HMRC uses a cumulative method where tax is calculated on your year-to-date earnings, so any overpayment or underpayment in one month is corrected in subsequent months. This means your take home pay can vary slightly from month to month, especially at the start of the tax year or if your circumstances change.
What is the difference between gross pay and net pay?
Gross pay is the total amount you earn before any deductions. It includes your basic salary, overtime, bonuses, and any other taxable payments. Net pay (also called take home pay) is the amount you actually receive in your bank account after all deductions have been made. The main deductions are income tax, employee National Insurance contributions, student loan repayments (if applicable), and pension contributions. Understanding the difference is important when negotiating salary, budgeting, and checking that your payslip deductions are correct.
How are National Insurance contributions calculated on my payslip?
For employees in 2025/26, National Insurance is calculated at 8% on earnings between £12,570 and £50,270 per year (the Primary Threshold and Upper Earnings Limit), and at 2% on earnings above £50,270. On a monthly payslip, these thresholds are divided by 12: you pay 8% on earnings between £1,048 and £4,189 per month, and 2% above £4,189. Your employer also pays NI at 15% on your earnings above £5,000 per year (£417 per month), though this does not appear as a deduction on your payslip as it is an additional cost borne by your employer.
What are year-to-date (YTD) figures on my payslip?
Year-to-date (YTD) figures show the cumulative totals of your earnings and deductions from the start of the tax year (6 April) to the current pay date. YTD totals typically include gross pay, income tax, National Insurance, and sometimes student loan and pension contributions. These figures are important for checking that your tax is being calculated correctly across the year, and they are used by HMRC's cumulative PAYE system to ensure you pay the right amount of tax overall. If you change jobs mid-year, your P45 from your previous employer includes YTD figures that your new employer uses to continue your tax calculation correctly.
How does pension contribution affect my payslip?
The impact on your payslip depends on the type of pension scheme. With salary sacrifice, your contractual salary is reduced before tax and NI are calculated, so your gross pay on the payslip is lower but you save on both tax and NI. With a net pay arrangement, the pension is deducted from your gross pay before tax but after NI, so you get full tax relief through payroll but still pay NI on your full salary. With relief at source, your pension is taken from your net pay (after tax and NI), and your pension provider claims back basic rate tax relief. Each method results in different payslip figures for the same contribution rate.
What should I do if my payslip looks wrong?
If you believe your payslip is incorrect, first check your tax code is right by comparing it with your most recent HMRC coding notice or your Personal Tax Account online. Then verify the deduction calculations using a payslip calculator. Common errors include the wrong tax code being applied, student loan deductions when you have repaid your loan, missing pension contributions, or incorrect overtime calculations. If you find an error, raise it with your employer's payroll department. If you believe HMRC has issued the wrong tax code, you can contact HMRC directly or update your details through your Personal Tax Account at gov.uk.

Related Calculators

Salary CalculatorCalculate your take home pay after tax, National Insurance, student loans, and pension contributions.Income TaxCalculate your UK income tax breakdown by band for England, Scotland, or Wales.National InsuranceCalculate employee and employer National Insurance contributions for 2025/26.PensionProject your pension pot at retirement and estimate monthly income using the 4% withdrawal rule.