Take Home Pay Calculator UK

Created by Wei Bin Loo
Reviewed by Tibor Pál, PhD candidate and Steven Wooding
Based on research by
HMRC Income Tax Rates and Personal Allowances
Last updated: Jan 15, 2023

With this take-home pay calculator, we aim to help you calculate the amount of taxes you have to pay and the amount of money you get to keep working in the UK.

We have written this article to help you understand the following:

  • What are the income taxes in the UK;
  • How much income tax you have to pay; and
  • How to calculate the income tax in the UK.

We will also demonstrate some UK income tax calculation examples to help you understand the process used in the calculations.

What are the UK income taxes?

In the UK, your salary is subjected to two main taxes. They are the income taxes and the National Insurance contributions (NICs).

Income taxes are the taxes you pay when you earn a salary by working in the UK. The UK government collects these taxes to keep the government running and create a favorable environment for you to work in.

The National Insurance contributions, also called NI or NIC, are another taxes you must pay if you work in the UK. These payments give you the entitlement to certain benefits, such as the Maternity Allowance and State Pension.

Now, let's look at how we can calculate your income after tax.

How to use the take home pay calculator UK? How much income tax do I pay?

Our take-home pay calculator is straightforward and very easy to use. It helps you to calculate your income after tax. By following the four steps below, you will be able to calculate the UK income tax that you need to pay. These steps can also help you to calculate your income after tax.

  1. Calculate your total annual income

    The first step is to calculate your total annual income. There are three components of your total annual income, they are:

    • employment income

    • self-employment net income

    • rental net income

    You can calculate this using the formula below:

    total annual income = employment income + self-employment net income + rental net income

    To understand how to calculate your net income for your self-employment or rental property, check out our net income calculator.

  2. Determine the tax year that you are looking at

    The next step is to select the correct tax year. The UK government makes changes to the income tax and National Insurance schemes almost every year. Thus, it is essential for you to understand which tax year that you are looking at.

  3. Determine your location in the UK

    Now, you need to select your location in the UK. This step is because Scotland has a different income tax scheme compared to the rest of the UK.

  4. Understand your take-home pay

    Well, you should now be able to see how much income tax and National Insurance contribution you need to pay. The calculator will also display your take-home pay and your effective tax rate. As your income increases, more of your income will be allocated to the higher tax bracket, increasing your effective tax rate.

    To understand more about National Insurance contributions, check out our national insurance calculator.

    For example, when your total annual income is £60,000, your effective tax rate is around 27.64%. When your total annual income is £200,000, your effective tax rate will be around 40.71%.

Enjoy using our take-home pay calculator!

FAQ

What is the impact of the new UK government budget?

After a few back-and-forth changes, the UK government has decided to remain with the original tax scheme. This means no changes will be made to the income tax scheme with the new government budget.

How much income tax do I pay if I earn £70,000 a year?

You are paying a total tax of £20,854.62. Your take-home pay is £49,145.38. This includes the income tax of £15,432 and the National insurance contribution of £5,422.62.

What is PAYE?

PAYE stands for Pay As You Earn. PAYE is the system that employers use to deduct income taxes and National Insurance contributions from your salary before paying you your take-home pay.

How do I calculate my total income?

You can calculate it using the following steps:

  1. Determine your employment income.

  2. Determine your self-employment net income.

  3. Determine your rental net income.

  4. Apply the total income formula: total income = employment income + self-employment net income + rental net income.

Wei Bin Loo
Total annual income
Employment income
£
Self-employment net income
£
Rental net income
£
Total annual income
£
Other options
Tax year
2022 / 2023
Location
England
Check out 3 similar uk finance calculators 🇬🇧
Capital gains tax UKNational insurance UKStamp Duty Land Tax (SDLT)
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