Your Details
Gross contribution deducted before Income Tax. NI and student loans use salary before pension. For salary sacrifice use the Pension Relief calculator. Annual estimates; emergency codes are not period-by-period PAYE.
Your Payslip Breakdown
Estimates based on HMRC 2026/27 rates. Does not include benefits in kind, overtime or employer-specific deductions.
How is Income Tax (PAYE) and NI Calculated on a UK Payslip?
Under HMRC Pay As You Earn (PAYE), employers deduct Income Tax and Class 1 National Insurance before paying your net wage. Income Tax is charged at 20%, 40%, or 45% above your tax code threshold, while employee NI is charged at 8% and 2%.
What Do the Different Tax Codes Mean on a Payslip?
Your HMRC tax code dictates your personal tax-free allowance for each pay period. The standard UK code for 2026/27 is 1257L, granting £12,570 per year (£1,047.50 monthly) tax-free.
| Tax Code Prefix/Suffix | Meaning & Statutory Application | Allowance Effect |
|---|---|---|
| 1257L | Standard cumulative UK Personal Allowance | £12,570 tax-free per year |
| BR | Basic Rate (no tax-free allowance, often 2nd job) | Flat 20% tax on all pay |
| D0 | Higher Rate (no tax-free allowance) | Flat 40% tax on all pay |
| M / N | Marriage Allowance recipient (M) or transferor (N) | ±£1,260 allowance transfer |
| K codes | Untaxed income/benefits exceed personal allowance | Adds taxable amount to pay |
| W1 / M1 | Non-cumulative emergency tax basis | Calculated per pay period in isolation |
Step-by-Step Payslip Calculations (Worked Examples)
The mathematical breakdowns below illustrate monthly deductions for standard salary levels in 2026/27.
£25,000 Salary — 5% Net Pay Pension
Annual England/Wales/Northern Ireland illustration with standard allowance and no student loan. Gross pension reduces Income Tax; NI uses salary before pension. Payroll rounding and qualifying-earnings pension arrangements can differ.
£50,000 Salary — 5% Net Pay Pension
Annual England/Wales/Northern Ireland illustration with standard allowance and no student loan. Gross pension reduces Income Tax; NI uses salary before pension. Payroll rounding and qualifying-earnings pension arrangements can differ.
£100,000 Salary — 5% Net Pay Pension
Annual England/Wales/Northern Ireland illustration with standard allowance and no student loan. Gross pension reduces Income Tax; NI uses salary before pension. Payroll rounding and qualifying-earnings pension arrangements can differ.
Frequently Asked Questions
Your employer deducts PAYE income tax based on your tax code (e.g. 1257L for £12,570 tax-free) at 20% basic, 40% higher, or 45% additional rates.
Employees pay Class 1 National Insurance at 8% on earnings between £12,570 and £50,270 per year, and 2% on earnings above £50,270 for 2026/27.
Student loan repayments are automatically deducted at 9% of earnings above statutory plan thresholds (e.g. Plan 2: £29,385) or 6% for Postgraduate loans (£21,000).
Tax code 1257L represents the standard UK tax-free Personal Allowance of £12,570 per year, allowing £1,047.50 of tax-free gross pay per month.