Methodology and sources
All figures are for the tax year 6 April 2026 to 5 April 2027 and come from HMRC’s Rates and thresholds for employers 2026 to 2027. The calculation is annual, as in HMRC’s own estimator; your payslips spread it across your pay periods.
Income tax
| Band (England, Wales, NI) | Taxable income above the allowance | Rate |
|---|---|---|
| Basic | £0 – £37,700 | 20% |
| Higher | £37,701 – £125,140 | 40% |
| Additional | over £125,140 | 45% |
| Band (Scotland) | Taxable income above the allowance | Rate |
|---|---|---|
| Starter | £0 – £3,967 | 19% |
| Basic | £3,968 – £16,956 | 20% |
| Intermediate | £16,957 – £31,092 | 21% |
| Higher | £31,093 – £62,430 | 42% |
| Advanced | £62,431 – £125,140 | 45% |
| Top | over £125,140 | 48% |
The personal allowance is £12,570 (tax code 1257L), reduced by £1 for every £2 of adjusted net income above £100,000.
National Insurance
Class 1 employee contributions, category A: 8% on earnings between the primary threshold (£12,570) and the upper earnings limit (£50,270), 2% above.
Student and postgraduate loans
9% of earnings above £26,900 (Plan 1), £29,385 (Plan 2), £33,795 (Plan 4) or £25,000 (Plan 5); 6% above £21,000 for postgraduate loans.
Pensions
- Salary sacrifice: the contribution reduces pay for income tax, National Insurance and student loans.
- Net pay arrangement: the contribution is deducted before income tax only.
- Relief at source: the contribution is paid from taxed pay; the provider claims 20% basic-rate relief, and the basic and higher rate limits are extended by the gross contribution.
Mortgages and Stamp Duty
Repayment mortgages use the standard annuity formula, with interest charged monthly at the annual rate ÷ 12. Stamp Duty Land Tax uses the residential rates for England and Northern Ireland published on gov.uk: 0% to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5 million, 12% above; first-time buyers pay 0% to £300,000 and 5% to £500,000 (price up to £500,000); a 5% surcharge applies to additional properties. In Scotland, LBTT: 0% to £145,000 (£175,000 for first-time buyers), 2% to £250,000, 5% to £325,000, 10% to £750,000, 12% above, plus the 8% Additional Dwelling Supplement on the whole price for additional homes. In Wales, LTT: 0% to £225,000, 6% to £400,000, 7.5% to £750,000, 10% to £1.5 million, 12% above, with separate higher rates for additional properties and no first-time buyer relief.
Limits
The calculator assumes employment income only, tax code 1257L, and no benefits in kind, Marriage Allowance or Blind Person’s Allowance. Spotted a difference with your payslip? Email [email protected].