How we calculate

We take rates from official publications, not third-party summaries. The figures below are drawn from and can be verified against:

Tax is applied in bands to your income above the Personal Allowance. The allowance is £12,570, but it tapers away once adjusted net income passes £100,000 (you lose £1 of allowance for every £2 over the limit, so it's gone by £125,140 — the cause of the well-known 60% effective rate in that band).

Scottish taxpayers have their own bands and rates (set by the Scottish Parliament), though the Personal Allowance and its taper are the same UK-wide. National Insurance is also UK-wide. For 2026/27:

National Insurance applies UK-wide on earnings above the Primary Threshold of £12,570:

We annualise NI for clarity. In reality it's worked out per pay period, so a one-off bonus can attract slightly more NI in the month it's paid than our annual figure implies. Those over State Pension age pay no NI on earnings.

You repay a percentage of income above your plan's threshold. Interest is set against RPI (3.2% for the year to 31 August 2026), with Plan 2 and Postgraduate loans capped at 6% from September 2026 and sliding with income. Any balance left after the write-off period is cancelled.

Repayments in the take-home calculators are based on gross income. The overpayment tool projects the loan year by year to show whether you'd clear it before write-off — the only situation in which overpaying saves money.

Child Benefit is £27.05/week for the eldest or only child and £17.90/week for each additional child. The High Income Child Benefit Charge claws it back at 1% for every £200 of adjusted net income above £60,000, reaching 100% at £80,000. Crucially, the charge is assessed on the higher earner's individual income, not the household total — which is why our household calculator treats two incomes separately.

Statutory Maternity Pay runs for up to 39 weeks: 90% of your average weekly earnings for the first 6 weeks, then the lower of £194.32 or 90% of earnings for up to 33 more weeks. You must earn at least £129/week on average to qualify. Statutory Sick Pay is £123.25/week for up to 28 weeks. Both are shown gross (Income Tax and NI still apply) and before any enhanced employer scheme.

Each nation taxes residential purchases in slices — you pay a band's rate only on the part of the price inside that band. Rates below are those in force for completions in 2026/27 (none of the three governments changed them at their latest Budgets).

England & Northern Ireland (SDLT). First-time buyers pay 0% to £300,000 and 5% to £500,000 — above £500,000 the relief is lost entirely. Additional properties add 5 percentage points to every band (from £40,000), and non-UK-resident buyers add a further 2. The return is due within 14 days of completion.

Scotland (LBTT). First-time buyer relief extends the nil band from £145,000 to £175,000 (worth up to £600, with no upper price cap). Additional dwellings pay an 8% Additional Dwelling Supplement on the whole price (from £40,000) on top of the standard bands, reclaimable if the old main home is sold within 36 months. Returns are due within 30 days.

Wales (LTT). No first-time buyer relief — the £225,000 nil band applies to everyone. Additional properties use a separate higher-rate table (from £40,000). Returns are due within 30 days.

Higher LTT rates for additional property: 5% to £180,000, 8.5% to £250,000, 10% to £400,000, 12.5% to £750,000, 15% to £1,500,000, 17% above. Our calculator covers straightforward residential purchases by individuals — not companies, six-plus dwellings, mixed use, shared ownership elections or lease premiums.

When you sell a second home or buy-to-let at a profit, Capital Gains Tax is due on the gain above the annual exempt amount of £3,000 (2026/27). Residential property has its own higher rates — the gain stacks on top of your income, and the part that falls in any unused basic-rate band is taxed at 18%, with everything above at 24%.

Your main home is normally exempt under Private Residence Relief, so this applies to additional property. UK residential disposals must be reported and paid within 60 days of completion. Our calculator splits the gain at the higher-rate threshold using your income, applies the £3,000 allowance, and lets you halve figures for a jointly owned property (each owner has their own allowance and bands). It does not model letting relief, PRR apportionment for periods of absence, or enhancement-cost deductions beyond the purchase and selling costs you enter.

Yield. Gross yield is annual rent ÷ property price. Net yield subtracts running costs — letting fees, insurance, maintenance, a void allowance — before dividing by the price, and is the more honest measure. Neither includes the mortgage or tax; the buy-to-let analyser carries the deal through to after-tax cashflow and the return on the cash you actually put in.

Section 24 (individual landlords). Since April 2020, private landlords can no longer deduct mortgage interest from rental profit. Instead you are taxed on the full profit and given a flat 20% tax credit on the interest. For a basic-rate taxpayer the credit roughly cancels the extra tax; for a higher-rate taxpayer it does not, so you are effectively taxed at 40% on profit you never really keep — and the extra income can tip you into a higher band or the £100,000 allowance taper. We model this by taxing the profit at your marginal rate on top of your other income, then subtracting the 20% credit (capped at the interest, the profit, and income above the Personal Allowance).

The ICR stress test. Buy-to-let lenders want the rent to cover the mortgage interest by a margin — commonly 125% for companies and basic-rate borrowers and around 145% for higher-rate individuals — tested at a stressed interest rate (we use ~5.5%) rather than the pay rate. Our analyser flags whether your rent clears a typical stress test.

Limited company. A company deducts mortgage interest in full and pays Corporation Tax at 19% on profits up to £50,000, rising through marginal relief (a 3⁄200 fraction) to 25% at £250,000. That often beats personal ownership for higher-rate landlords and portfolios — but extracting the profit as dividends is taxed again personally at 10.75% / 35.75% / 39.35% after the £500 dividend allowance, so a company suits reinvesting and scaling more than drawing the income now. We compare both routes on the same deal and show how the gap widens as the portfolio grows. On sale, a company pays Corporation Tax on the gain rather than the 18%/24% CGT an individual pays.

Take-home pay. We apply the Personal Allowance (tapered if needed), tax the remainder band by band, add National Insurance and any student loan, and subtract pension contributions according to the scheme type you choose:

• Salary sacrifice — taken before Income Tax and NI; the whole amount goes to your pension.
• Net pay arrangement — taken before Income Tax, but NI is still charged on it.
• Relief at source — paid from net pay; you contribute 80% and the scheme reclaims 20%, with the basic-rate band extended to give higher-rate relief.

Adjusted net income — used for both the Personal Allowance taper and the Child Benefit charge — is gross pay minus pension and any salary sacrifice.

Mortgages and loans use the standard amortisation formula, where r is the monthly rate and n the number of months: monthly payment = P · r · (1+r)ⁿ ÷ ((1+r)ⁿ − 1). Investment growth compounds monthly. Debt vs invest runs both choices over an identical monthly budget and time horizon — the two tie exactly when your investment return equals the debt's interest rate, which is the principle behind the decision.

Property tools reuse the same building blocks: the overpayment, interest-only and rent-vs-buy calculators amortise the mortgage as above, while the buy-to-let analyser layers on the running costs, Section 24 (or Corporation Tax) treatment described earlier and the Stamp Duty surcharge, so every property figure traces back to the same rate tables as the take-home calculators.

Worked example — £45,000 salary, 5% salary-sacrifice pension, rest of UK, 2026/27:

• We assume a standard tax code with the full Personal Allowance, no benefits in kind, and no other income.
• National Insurance is annualised; real payslips calculate it per pay period.
• Pension is modelled as salary sacrifice in most tools unless you choose otherwise; your employer must offer it for the NI saving to apply.
• Projection tools (student loan, debt vs invest) grow salaries and thresholds at the rate you set and assume steady returns and interest — real life varies.
• Statutory pay figures are the government minimum, gross of tax and NI.
• Property tools assume straightforward residential purchases by individuals (or a simple company) and the growth, rent and cost figures you enter; they don't model letting relief, complex CGT reliefs, portfolio-level finance or every lender's exact stress rules.
• These are estimates to inform your own decisions — they are not personalised financial, tax or legal advice.

GOV.UK's Check your Income Tax service is the authoritative place to see your current position: sign in with a Government Gateway account and it shows the tax code and employer-reported pay HMRC is actually working from. Where it stops is scenario work — it covers PAYE employment and pension income only, it has nothing for the self-employed or anyone whose tax runs wholly through Self Assessment, and it can't model a change you haven't made yet.

That division of labour is deliberate. Use HMRC's service to confirm what is true about you today; use our calculators to explore what would change — a rise, a bonus, salary sacrifice, Scottish rates, a second income — with every rate we apply documented on this page. If our estimate and your payslip disagree, the usual culprit is a non-standard tax code, which the take-home calculator accepts directly.

UK tax rates and thresholds change every April, and student-loan interest is reset each September. We review and update every rate at the start of each tax year and whenever the government announces a change, and we keep the previous year's figures so the year-comparison tool stays accurate. Every page shows the tax year it applies to.

This page was last reviewed on 24 July 2026 for the 2026/27 tax year.

Every calculation runs entirely in your own browser using JavaScript. Your salary and personal figures are never sent to us or to any server — there is nothing to store and nothing to leak. You can use the site offline once it has loaded.