Income Tax Calculator Methodology

What this calculator does

Takes a gross annual salary and calculates UK income tax, employee National Insurance contributions (NI), and net take-home pay for 2025/26. Applies to England, Wales and Northern Ireland. Scottish income tax rates are handled separately.

The formula

Income Tax — 2025/26 (England, Wales & Northern Ireland)

  Personal Allowance (PA):
    If gross income ≤ £100,000:  PA = £12,570
    If gross income >  £100,000:  PA = max(£12,570 − (gross − £100,000) / 2,  £0)

  Taxable income = max(gross − PA,  £0)

  Tax due:
    Basic rate    20%  on taxable income up to £37,700
    Higher rate   40%  on taxable income from £37,701 to £112,570
    Additional    45%  on taxable income above £112,570

Employee National Insurance — 2025/26 (Class 1)

  Primary threshold:       £12,570/year
  Upper earnings limit:    £50,270/year

  NI due:
     8%  on earnings between £12,570 and £50,270
     2%  on earnings above £50,270

Assumptions

Standard personal tax code (1257L) — no adjustments for blind person's allowance, marriage allowance transfer, or other variations.
England, Wales and Northern Ireland rates. Scottish taxpayers have different income tax bands (use the Scottish income tax calculator if available).
No salary sacrifice, pension contributions, or other pre-tax deductions are modelled.
No student loan repayments are deducted.
No High Income Child Benefit Charge is calculated.
Single employment — no multiple income sources.
Full tax year — no mid-year changes.

Data sources

Figure	Value used	Source	Last checked
Personal Allowance	£12,570	HMRC — Income Tax rates and Personal Allowances	April 2026
Basic rate band	£37,700 (£12,571–£50,270)	HMRC — Income Tax rates and Personal Allowances	April 2026
Higher rate threshold	£50,270	HMRC — Income Tax rates and Personal Allowances	April 2026
Additional rate threshold	£125,140	HMRC — Income Tax rates and Personal Allowances	April 2026
PA taper start	£100,000	HMRC	April 2026
Employee NI main rate	8%	HMRC — National Insurance rates	April 2026
Employee NI additional rate	2%	HMRC — National Insurance rates	April 2026
NI primary threshold	£12,570/year	HMRC — National Insurance rates	April 2026
NI upper earnings limit	£50,270/year	HMRC — National Insurance rates	April 2026

Limitations

England, Wales and NI rates only. Scotland has separate income tax bands — the Scottish Government sets rates independently of Westminster.
Does not model salary sacrifice — contributions to a pension via salary sacrifice reduce your taxable income and NI liability, which this calculator ignores.
Does not model pension contributions made outside of salary sacrifice (which attract tax relief but don't reduce the NI calculation).
Does not calculate student loan repayments (Plan 1, Plan 2, Plan 4, or Plan 5).
Does not calculate the High Income Child Benefit Charge (applies where income exceeds £60,000 and Child Benefit is claimed).
Does not model the Scottish income tax bands (starter, basic, intermediate, higher, advanced, top).

Worked example — £60,000 salary, 2025/26

Step 1 — Personal Allowance: £12,570 (salary below £100,000)

Step 2 — Taxable income: £60,000 − £12,570 = £47,430

Step 3 — Income tax:

Basic rate: £37,700 × 20% = £7,540
Higher rate: (£47,430 − £37,700) × 40% = £9,730 × 40% = £3,892
Total income tax: £11,432

Step 4 — National Insurance:

8% band: (£50,270 − £12,570) × 8% = £37,700 × 8% = £3,016
2% band: (£60,000 − £50,270) × 2% = £9,730 × 2% = £195
Total NI: £3,211

Step 5 — Take-home:
£60,000 − £11,432 − £3,211 = £45,357/year = £3,780/month

You can verify the income tax figure against HMRC's own tax checker at https://www.tax.service.gov.uk/estimate-paye-take-home-pay/your-pay.

Changelog

Date	Change
May 2026	Initial publication

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Income Tax Calculator — Methodology