Your payslip tells two stories. There is the salary your employer agreed to pay you, and there is the amount that actually lands in your bank account. The gap between those two numbers is mostly income tax and National Insurance, and the rules for the 2025/26 tax year (6 April 2025 to 5 April 2026) decide exactly how big that gap is.
This guide walks through the main figures for England, Wales and Northern Ireland, with a short note on Scotland, so you can read your payslip with confidence and plan ahead.
Gross pay versus net pay
Gross pay is the total your employer agrees to pay you before any deductions. Net pay, often called take-home pay, is what is left after income tax, National Insurance, pension contributions, student loan repayments and any salary sacrifice.
A useful way to picture it: out of every pound you earn above the tax-free allowance, the government takes a slice for income tax, and another slice for National Insurance. Pension contributions are deducted too, but they are your money, just saved for later.
If you want a quick estimate for your own situation, you can use the National Calculators UK salary calculator to break a gross figure down into monthly and weekly take-home pay.
The Personal Allowance
For 2025/26, most people can earn £12,570 a year before paying any income tax. This is the standard Personal Allowance, and it has been frozen at this level since 2021/22.
There are two important catches. First, if your income goes above £100,000, the allowance is reduced by £1 for every £2 you earn above that threshold, and disappears entirely at £125,140. Second, your tax code controls how the allowance is applied through PAYE. A wrong code is one of the most common reasons people overpay or underpay tax.
Income tax bands for 2025/26
For England, Wales and Northern Ireland, the bands above the Personal Allowance are:
- Basic rate, 20%: taxable income from £12,571 to £50,270
- Higher rate, 40%: taxable income from £50,271 to £125,140
- Additional rate, 45%: taxable income above £125,140
The bands work in slices. Someone earning £60,000 does not pay 40% on the whole salary. They pay 0% on the first £12,570, 20% on the next £37,700, and 40% only on the £9,730 above the higher-rate threshold.
Scotland has its own bands and rates, set by the Scottish Parliament. If you live in Scotland, your Personal Allowance is the same, but the rates and thresholds above it differ, and the higher rate kicks in earlier. You can find the current Scottish bands on gov.uk.
Full official figures sit on the government pages: Income Tax rates and Personal Allowances and the HMRC summary at Rates and allowances for Income Tax.
National Insurance in 2025/26
National Insurance is the UK version of social security, funding the state pension and parts of the NHS. For employees (Class 1), the main 2025/26 rates are:
- 8% on weekly earnings between £242 and £967 (the Primary Threshold to the Upper Earnings Limit, which line up with the £12,570 and £50,270 annual figures)
- 2% on earnings above £967 a week
You stop paying NI once you reach State Pension age, even if you keep working. The current rates and thresholds are published by HMRC at National Insurance rates and categories.
If you are self-employed, the picture is different. Class 2 has been largely abolished for most profits, and Class 4 is charged at 6% between £12,570 and £50,270 of profit, and 2% above that.
Putting it together: a worked example
Take a salary of £40,000 in England for 2025/26:
- Personal Allowance covers the first £12,570, no tax.
- The remaining £27,430 falls in the basic rate band, so income tax is £5,486.
- National Insurance at 8% on the same £27,430 is £2,194.40.
- Total deductions: £7,680.40, leaving take-home pay of roughly £32,319.60 a year, before any pension or student loan.
To check different scenarios, try the UK income tax calculator or browse other tools on the National Calculators UK hub.
FAQ
Why does my tax code matter so much? Your tax code tells your employer how much of your salary is tax-free. The standard 2025/26 code is 1257L. If yours looks different, HMRC may be adjusting for benefits, underpaid tax from a previous year, or a second job. A wrong code can quietly cost you hundreds of pounds, so it is worth checking on your personal tax account.
Do I pay National Insurance on a workplace pension? No. Workplace pensions in payment are subject to income tax, but not National Insurance. That is one reason pension income can feel slightly higher in net terms than the same salary from work.
What changes for 2026/27? The Personal Allowance and main income tax thresholds are currently frozen until April 2028, so more people are pulled into higher bands each year as wages rise. Always check gov.uk close to the new tax year for the latest confirmed figures.