Question 1

How is take-home pay calculated in 2025/26?

Accepted Answer

Your take-home pay is your gross salary minus income tax, employee National Insurance (8% main rate), student loan repayments (if applicable), and pension contributions. The personal allowance remains at £12,570, meaning you pay no income tax on the first £12,570 you earn.

Question 2

What are the income tax bands for 2025/26?

Accepted Answer

The basic rate is 20% on taxable income up to £37,700 (earnings of £12,571 to £50,270). The higher rate is 40% from £50,271 to £125,140. The additional rate is 45% on income above £125,140. The personal allowance tapers for income above £100,000.

Question 3

How much National Insurance do employees pay?

Accepted Answer

Employees pay 8% NIC on earnings between £12,570 and £50,270 (the primary threshold to upper earnings limit), then 2% on everything above £50,270. This is deducted automatically from your pay by your employer.

Question 4

How do student loan repayments affect take-home pay?

Accepted Answer

Student loan repayments are 9% of income above your plan threshold (Plan 1: £24,990, Plan 2: £27,295, Plan 4: £31,395, Plan 5: £25,000) or 6% above £21,000 for postgraduate loans. They're deducted through PAYE alongside tax and NI.

Take-Home Pay Calculator 2025/26

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