Gross Salary vs Net Salary Calculator: Understanding Your True Take-Home Pay
Understand the difference between gross and net salary, including tax, NI, and deductions.
Gross vs Net Salary: Understanding the Difference
Your gross salary is what your employer agrees to pay you — the headline figure on your job offer letter. Your net salary is what actually lands in your bank account after income tax, National Insurance (NI), pension contributions, and any other deductions. For most UK employees the gap between the two can be surprisingly large, especially once you cross higher-rate thresholds.
How UK Income Tax and National Insurance Work (2025/26)
Income tax in the UK is banded. The personal allowance for 2025/26 is £12,570 — earnings below this are tax-free. The basic rate of 20% applies from £12,571 to £50,270. The higher rate of 40% applies from £50,271 to £125,140, and the additional rate of 45% applies above £125,140.
National Insurance (Class 1, employee) is charged at 8% on earnings between £12,570 and £50,270, and 2% on earnings above £50,270. This changed from 12%/2% to 8%/2% in January 2024 and remains for 2025/26.
Gross vs Net Salary Comparison Table (2025/26)
| Gross Salary | Income Tax | National Insurance | Net Salary (approx) | Effective Rate |
|---|---|---|---|---|
| £30,000 | £3,486 | £1,394 | £25,120 | 16.3% |
| £40,000 | £5,486 | £2,194 | £32,320 | 19.2% |
| £50,000 | £7,486 | £2,994 | £39,520 | 21.0% |
| £60,000 | £11,432 | £3,130 | £45,438 | 24.3% |
Understanding Your P60 and Payslip
Your payslip breaks down every deduction each month. The key figures to check: gross pay, taxable pay (gross minus pension contributions if your scheme uses salary sacrifice), income tax deducted, and NI deducted. Your P60 is an annual summary issued by 31 May each year, showing your total gross earnings and total tax paid — vital for self-assessment tax returns or tax rebate claims.
If you contribute to a workplace pension under auto-enrolment, the minimum employee contribution is 5% (3% from your employer). These contributions may be made pre-tax via salary sacrifice, which reduces your taxable gross and lowers both your income tax and NI bill — effectively giving you a bigger net salary boost than the headline percentage suggests.