How this is calculated
Taxable income = gross − £12,570 personal allowance. Income Tax is then 20% on the first £37,700 of taxable income, 40% on the next slice up to £125,140 of gross, and 45% above. National Insurance is calculated on gross directly: 8% on earnings between £12,570 and £50,270, then 2% on everything over £50,270.
Worked example on £45,000: taxable income is £32,430, all within the basic rate band, so Income Tax is £6,486. National Insurance is 8% of the £32,430 between the thresholds, or £2,594.40. Total deductions £9,080.40, leaving about £35,920 a year — roughly £2,993 a month.
The effective rate is around 20.2% even though the person is a 20% taxpayer, because NI sits on top. Combined marginal rate in the basic band is 28%, and 42% in the higher band — the numbers that actually matter when deciding whether a raise or a pension contribution is worth it.
The 60% trap between £100,000 and £125,140
The personal allowance is withdrawn by £1 for every £2 of income above £100,000. Because that withdrawn allowance was previously untaxed and is now taxed at 40%, the effective marginal rate in this band is 60% — higher than the 45% additional rate that applies above it.
The allowance is fully gone at £125,140. Between those two figures, £1,000 of extra salary nets about £400 after tax and NI. This is why pension salary sacrifice is so heavily used at that income level: contributing enough to bring adjusted income back to £100,000 is effectively a 60% relief, and it also protects tax-free childcare and the 30 free hours, both of which cut off at £100,000 per parent.
What this estimate leaves out
Scottish Income Tax, which has its own bands and adds intermediate and advanced rates — a Scottish taxpayer on £45,000 pays several hundred pounds more than the figure shown here. National Insurance is UK-wide and unaffected.
Also excluded: student loan repayments (9% above the plan threshold, or 6% for postgraduate loans, and many graduates pay both); workplace pension contributions under auto-enrolment, typically 5% of qualifying earnings; salary sacrifice arrangements; the High Income Child Benefit Charge; and any non-standard tax code, which is common if you have a company car or previously underpaid.
How to use the united kingdom salary calculator
- Enter your annual gross salary. Use the headline figure from your contract or offer letter, in £, before any deductions.
- Read the net and monthly rows. Net salary is what remains for the year; take-home per month is that divided by twelve.
- Check the effective rate. Income tax and National Insurance as a share of gross. This is the number to compare across countries — not the top bracket rate, which almost nobody actually pays on their whole income.