UK Salary Calculator 2025/26

Both tools calculate UK income tax and National Insurance, but they serve different purposes:

• UK Salary Calculator (this tool) — Focuses on take-home pay. Enter any pay period, compare two salaries, calculate contractor day rates.
• UK Tax Calculator — Focuses on detailed tax analysis. Shows comprehensive tax band breakdowns and pension tax relief.

Your take-home pay is your gross salary minus all deductions:

1. Income Tax — Based on your taxable income after personal allowance (£12,570 for 2025/26)
2. National Insurance — 8% on earnings between £12,570 and £50,270, then 2% above
3. Student Loan — 9% above your plan threshold (if applicable)
4. Pension — Your contribution percentage (if applicable)

The formula is: Hourly Rate × Hours Per Week × 52 Weeks = Annual Salary

For example, £15/hour × 37.5 hours × 52 weeks = £29,250/year

Select "Hourly" as your input type above and the calculator converts automatically.

A contractor day rate is the daily fee charged by freelancers and contractors. Unlike permanent employees who work ~252 days/year, contractors typically work fewer days (200-230) after accounting for:

• No paid holidays (25-28 days)
• Gaps between contracts
• Sick days without pay
• Bank holidays (8 days)

Yes. Scotland has different income tax rates. Select "Scotland" as your region and the calculator uses Scottish rates:

• Starter Rate: 19%
• Basic Rate: 20%
• Intermediate Rate: 21%
• Higher Rate: 42%
• Advanced Rate: 45% (2025/26)
• Top Rate: 48%

Salary sacrifice means your employer reduces your gross salary by your pension contribution before calculating tax and NI. You save both income tax AND National Insurance.

Example on £40,000 with 5% pension:

• Without: Pay tax/NI on £40,000
• With: Gross becomes £38,000, less tax AND less NI

Your marginal rate is the tax rate on your next £1 of income:

• Effective rate: Total tax ÷ Total income (average)
• Marginal rate: Tax on the next pound (important for pay rises)

Watch out for the 60% trap! Between £100,000 and £125,140, you lose £1 of personal allowance for every £2 earned. Our UK Tax Calculator shows this in detail.

This calculator uses official HMRC rates for 2024/25 and 2025/26. It accurately calculates:

• ✅ Income tax (England/Wales/NI and Scotland)
• ✅ National Insurance (Class 1 Employee)
• ✅ Student loan repayments (all plans)
• ✅ Pension contributions

It does not account for: benefits in kind, company car tax, marriage allowance, or other HMRC adjustments. For official calculations, visit GOV.UK.

Yes! Use the Compare tab:

1. Salary A: Enter your permanent annual salary
2. Salary B: First use the Contractor tab to get the equivalent annual salary, then enter it in Salary B

Remember contractors need 30-50% more to match a permanent role's total package (no paid holidays, no employer pension, no sick pay, gaps between contracts).