Your Total Income After Tax
|Salary Before Tax|
|Salary After Tax||Please enter salary|
Simply enter your annual or monthly income into the salary calculator above to find out how UK taxes affect your income. You'll then get a breakdown of your total tax liability and take-home pay.
- Salary Before Tax
- your total earnings before any taxes have been deducted. Also known as Gross Income.
- Salary After Tax
- the money you take home after all taxes and contributions have been deducted. Also known as Net Income.
Your Income Tax Breakdown
|National Insurance (NI)|
|Total Tax Due||Please enter salary|
- Total Tax Due
- the sum of all taxes and contributions that will be deducted from your gross salary.
The deductions used in the calculator assume you are not married and have no dependants. You may pay less if tax credits or other deductions apply.
Want to know how your income compares to the London average, or even how to pay less in tax overall? Find out more below:
Taxes in the UK
Our simple salary calculator estimates your take-home pay after your employer has made deductions from your total salary. These include income tax and National Insurance payments. See the tables below to find out the UK's income tax and National Insurance rates for the current year.
income tax is paid on your personal earnings. The system is based on marginal tax rates, with your total tax payment calculated as a percentage of your income within certain thresholds. This means you don't pay a flat rate of tax for all your earnings. Firstly, everyone can earn a certain amount of tax-free income. This is known as your personal allowance, which works out to £12,570 for the 2021/2022 tax year. You'll then pay 20% on any of your earnings between £12,571 and £50,270, and 40% on earnings between £50,271 and £150,000. Anything you earn above £150,000 is taxed at 45%.
For every £2 you earn over £100,000, your tax-free personal allowance decreases by £1. This means that as you earn more beyond that figure, more of your total income is taxed.
National Insurance (NI)
anyone who earns above a certain amount must pay National Insurance (NI) in addition to income tax. This is a mandatory contribution that entitles you to certain state benefits including the State Pension and Jobseeker's Allowance. Employees usually pay Class 1 NI contributions while self-employed people must pay Class 2 contributions. As with income tax, you'll only pay a higher rate of NI on income over a certain threshold — rather than paying the top band on all your earnings.
Student Loan Repayments
in the UK, students are required to contribute towards their student loan debt once they start earning over a certain threshold. You'll have to make Plan 1 loan repayments if your course started before 1 September 2012 or if your loan is from the Scottish or Northern Irish student finance agencies. Plan 2 repayments apply to anyone whose course started after 1 September 2012 in England or Wales.
UK Tax Rates for 2020 – 2021
|UK Income Tax|
|Tax Band||Tax Rate||Taxable Income|
|Personal Allowance||0%||Up to £12,570|
|Basic Rate Tax||20%||£12,571 to £50,270|
|Higher Rate Tax||40%||£50,271 to £150,000|
|Additional Rate Tax||45%||£150,001 or more|
|National Insurance (Class 1 — for Employees Only)|
|How Much You Earn||How Much You'll Pay|
|Less than £9,568||0%|
|£9,569 to £50,270||12%|
|More than £50,270||2%|
|Student Loan Repayments|
|Student Finance Plan||Repayment Rates|
|Plan 1 (Course started before 1 September 2012 or loan from Northern Irish or Scottish student loan agency)||9% of pre-tax earnings over £19,895 per year|
|Plan 2 (Course started after 1 September 2012 in England or Wales)||9% of pre-tax earnings over £27,295 per year|
These are the tax rates for UK employees and do not apply to self-employed taxpayers.
Tax rates in Scotland vary from those elsewhere in the UK. While our tax calculator can give a strong indication of how much you'll earn after tax, Scottish users should check the rates that apply to them using the government website.
How to Manage Your Tax in the UK
How your tax payments are handled will depend on your employment status. The categories below are the most common ways that income tax is collected in the UK.
Most UK employees pay tax through the Pay As You Earn (PAYE) system. This means that your employer will deduct income tax, National Insurance and student loan payments directly from your total pay before it reaches your bank account. Taxpayers whose tax is collected from PAYE will not usually need to file a tax return unless they have another source of income or earn over £100,000.
UK Self-Assessment Tax Returns
if you're self-employed or have earned over £100,000, you'll usually need to complete an annual self-assessment tax return. Returns are usually due in January, and can be quite complex — often requiring the assistance of an accountant to complete.
To submit a tax return to HMRC, you'll need to register online or complete a paper copy. UK self-assessment tax returns should provide details of all income, benefits, pension contributions, allowances, and even charitable donations. Once your self-assessment tax return has been completed and approved by HMRC, you will typically need to pay in two stages that fall in January and July of each year.
How to Pay Less Tax in the UK
Thousands of people are paying too much tax in the UK. By claiming tax credits, free childcare, and putting money away for retirement, you could save hundreds or even thousands of pounds on tax each year.
Working Tax Credit alone could save eligible claimants up to £2,005 per tax year. These savings could increase dramatically if you can claim Child Tax Credit, or if you can structure your earnings to pay less using the Married Couple's Allowance which could help you to save a further £250.
You can even save money on UK income tax by preparing for the future. Saving for retirement is one of the easiest ways to reduce your taxable income, and basic rate taxpayers can even earn up to £1,000 of interest on their savings without needing to pay another penny.
To find out more about how you can save on your UK tax bill, read our full guide here.
Cost of Living in London
The median pre-tax pay in London is £3,916 per month. According to the results of our survey, a single person on this salary and with no dependants could afford to:
- rent a room in a shared flat or house
- have a standard lifestyle, affording to go out a few times per week
For more information, including details on how London compares to other UK cities, check out our dedicated Cost of Living page.View more
What is the Average UK Income?
The median monthly household income in the United Kingdom is £2,491 before tax and other deductions. This works out to an annual salary of £29,900 per year — although it's important to remember that this counts for households, not individuals. 50% of people also earn less than this figure, and the statistics only include those people who earn enough to pay basic rate tax.
Most taxpayers tend to be paid an annual salary, and those aged 23 and over should earn the National Minimum Wage of at least £8.91 per hour regardless of how they're paid. Full-time workers usually work 35 hours or more per week. This means that a full-time worker on minimum wage could expect their pre-tax earnings to total at least £311.85 per week, £1,351.35 per month, or £16,216.20 per year.
These figures put the UK 9th in the International Labour Organisation's 2018 ranking of the highest minimum wage by country.
The UK is home to people of many nationalities and the capital city, London, is particularly diverse. It is often recognised as one of the best cities in the world, but it's also one of the most expensive. London was ranked as the 19th most expensive global city to live in by the Mercer 2020 Cost of Living Survey — but many other parts of the country are significantly cheaper.
With low unemployment rates and a huge variety of active business sectors, residents of the UK benefit from strong career opportunities and an internationally renowned social security system.