Free UK PAYE Tax
Calculator 2025-2026

Quick Answer: On a £30,000 salary in England/Wales/NI for 2025-26:

• Income Tax: £3,486 (20% on £17,430 taxable income)
• National Insurance: £2,620 (12% on £17,430)
• Total Deductions: £6,106
• Take-Home Pay: £23,894/year or £1,991/month

The UK personal allowance (tax-free allowance) for 2025-26 is £12,570. This is the amount you can earn tax-free each year before paying income tax.

Important notes:

• You pay 0% tax on the first £12,570 you earn
• The allowance reduces by £1 for every £2 earned over £100,000 (affecting higher rate taxpayers)
• It's completely lost when you earn £125,140 or more
• Scottish rates have the same allowance but different income tax bands
• This is separate from capital gains tax and inheritance tax allowances which have their own thresholds

PAYE (Pay As You Earn) is calculated monthly by your employer using this process:

1. Calculate taxable income: Gross salary - Personal allowance (£12,570)
2. Apply tax bands: 20% basic rate (£12,571-£50,270), 40% higher rate (£50,271-£125,140), 45% additional rate (£125,140+)
3. Add National Insurance: 12% on £12,571-£50,270, then 2% above
4. Deduct pension contributions (if applicable)
5. Deduct student loan repayments (if applicable)

Your employer reports this to HMRC through Real Time Information (RTI).

Scotland has different income tax bands but the same National Insurance and personal allowance (£12,570).

Key differences for 2025-26:

• Scotland has 5 tax bands (19%, 20%, 21%, 42%, 47%)
• England/Wales/NI has 3 tax bands (20%, 40%, 45%)
• Scottish taxpayers generally pay more tax on salaries above £28,000
• The difference increases significantly above £50,000

Student loan repayments are deducted automatically through PAYE if you earn above the threshold for your plan type:

• Plan 1: 9% on earnings above £24,990
• Plan 2: 9% on earnings above £27,295
• Plan 4 (Scotland): 9% on earnings above £31,395
• Plan 5: 9% on earnings above £25,000
• Postgraduate: 6% on earnings above £21,000

You can have multiple plans and repay to each simultaneously.

Pension contributions are deducted before tax is calculated, reducing your taxable income. This means you get tax relief automatically.

Example on £50,000 salary with 5% pension:

• Pension contribution: £2,500 (5% of £50,000)
• Taxable income: £37,500 (£50,000 - £12,570 allowance)
• Tax saved: £500 (20% of £2,500)
• Net cost of pension: £2,000 (£2,500 - £500 tax relief)

Higher rate taxpayers (40%) save even more - £1,000 on a £2,500 contribution.

The UK offers several tax reliefs that can reduce your tax bill. Here are the main ones:

• Personal Allowance: £12,570 tax-free income (for most people)
• Marriage Allowance: Transfer £1,260 of unused personal allowance to your spouse (saves up to £252/year)
• Pension Tax Relief: Automatic relief on workplace pension contributions
• Blind Person's Allowance: Extra £3,070 tax-free income
• Gift Aid: Tax relief on charitable donations

Note: This is separate from capital gains tax (£3,000 annual exempt amount) and inheritance tax (£325,000 nil-rate band). Use our calculator to see how these tax reliefs affect your take-home pay.