PAYE employee – United Kingdom
Estimate take-home under PAYE (tax, NIC, loans, pension) or sole-trader profit after tax and Class 4 NIC. England/Wales/NI and Scotland; educational — not HMRC payroll.
by Simon Bodych
Methodology & sources
UK salary calculator — methodology (2026/27)
Educational model — not HMRC or payroll software.
PAYE employee
- Personal Allowance £12,570 (frozen to 5 April 2031); tapered by £1 per £2 of income above £100,000 (fully withdrawn at £125,140).
- rUK rates (England / Wales / NI): 20 % (£12,571–£50,270), 40 % (£50,271–£125,140), 45 % (above £125,140).
- Scottish rates 2026/27 (Scottish Budget, 13 January 2026): starter 19 %, basic 20 %, intermediate 21 %, higher 42 %, advanced 45 %, top 48 %.
- Class 1 NIC (category A): employee 8 % between PT £12,570 and UEL £50,270, then 2 %; employer 15 % above Secondary Threshold £5,000.
- Employment Allowance £10,500 per year (the £100k eligibility cap was removed from April 2025); reduces employer Class 1 NIC when employer cost is included.
- Student loans: Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000 (first repayments from April 2026); rate 9 %. Postgraduate 6 % above £21,000.
- Auto-enrolment qualifying earnings band £6,240–£50,270; minimum 5 % employee / 3 % employer (8 % total).
- Tax-code directives supported: standard (1257L), S/C prefix (Scottish/Welsh), K (negative PA), 0T, BR, D0, D1, D2, NT and the W1/M1/X emergency flag.
Primary references: HMRC — Rates and thresholds 2026/27, Budget 2025 OOTLAR Annex A, Scottish Income Tax 2026/27, TPR — AE thresholds 2026/27.
Self-employed / sole trader
- Profit = revenue − expenses; Income Tax on profit using the same bands as PAYE (with PA taper above £100,000).
- Class 4 NIC: 6 % on profits between LPL £12,570 and UPL £50,270, then 2 % above £50,270.
- Class 2 NIC: mandatory Class 2 was abolished from April 2024; voluntary only at £3.65/week when profit is below the Small Profits Threshold £7,105 (used to preserve NI record).
- Student and postgraduate loans use the same thresholds as PAYE, assessed on annual profit.
HMRC — Self-employed NIC rates, ATT — 2026/27 tax year updates.
Frequently asked questions
United Kingdom - PAYE employee
How do Scotland vs. rest-of-UK rates differ?
Rest of UK (rUK: England, Wales, NI): 20% basic (£12,571-£50,270), 40% higher (£50,271-£125,140), 45% additional. Scotland: 6 bands 19%/20%/21%/42%/45%/48% with lower thresholds. You pay Scottish tax if resident in Scotland - determined by your "main home" for most of the year. Pick the region in the calculator.
What is the personal allowance taper above £100k?
The £12,570 Personal Allowance tapers by £1 for every £2 above £100,000 - fully phased out at £125,140 gross. The effective marginal rate in the £100-125k band is ~60% (40% higher tax + loss of PA). The calculator applies the taper automatically. This is a classic "cliff" - many people max out pension to drop below £100k.
Student loan Plan 1-5 vs postgraduate - which applies?
Plan 1: pre-2012 (England/Wales) + all Scotland/NI. Plan 2: 2012-2023 (England/Wales). Plan 4: Scotland new from 2021. Plan 5: England new from Aug 2023. Postgraduate: separate postgrad loan. Each has its own threshold and % (e.g. Plan 2: £27,295 threshold, 9% of excess; Plan 5: £25,000, 9%). Check your plan on SLC/Student Finance.
How does the tax code work (1257L, emergency, K)?
1257L: standard with full Personal Allowance (£12,570) - most employees. K codes: negative allowance (flags extra income without withholding, e.g. company car BIK). Emergency (W1/M1/BR/0T/D0/D1): temporary when the employer lacks full data - does not cumulate YTD. Wrong code = wrong tax deducted. The calculator has "Custom / fixed allowance" to use a non-standard code.
NIC Class 1 - how much is deducted in 2026/27?
Primary threshold £12,570/year (2026/27 matches PA): below this no NIC. Primary: 8% from £12,571 to £50,270 upper earnings limit. Above UEL: 2%. The employer pays secondary from £5,000/year (2025 reform - reduced from £9,100) at 15%. The calculator uses these 2026/27 rates - figures may be indexed.
Auto-enrolment pension - must I join?
Yes, if you earn ≥ £10,000/year and you are aged 22-SPA (State Pension Age). Min 8% on qualifying earnings (£6,240-£50,270): 5% you + 3% employer (2026/27 rates). You can opt out in month #1 with no loss - later you forfeit what was paid. The calculator uses auto-enrolment by default; pick "Workplace pension: None" if opted out.
