# Methodology: how we calculate

> We work out take-home pay for the 2026/27 tax year (6 April 2026 to 5 April 2027) from gross annual salary, for one job paid through PAYE with no other income, using the rates HMRC publishes for employers.

- We work out take-home pay for the 2026/27 tax year (6 April 2026 to 5 April 2027) from gross annual salary, for one job paid through PAYE with no other income, using the rates HMRC publishes for employers.
- Income Tax: the Personal Allowance is £12,570. In England, Wales and Northern Ireland taxable income is charged at 20% up to £37,700, 40% up to £125,140 and 45% above. Scottish taxpayers pay 19%, 20%, 21%, 42%, 45% and 48% across six bands set by the Scottish Parliament.
- The Personal Allowance is reduced by £1 for every £2 of adjusted net income above £100,000, so it is zero from £125,140. This creates an effective 60% Income Tax rate between those amounts (67.5% for Scottish taxpayers).
- National Insurance: Class 1 employee contributions (category A) of 8% on earnings between £12,570 and £50,270 and 2% above, calculated on an annual basis. Your employer calculates it per pay period, so irregular pay can give a slightly different total.
- Student loans: 9% of gross pay above the threshold of your plan (Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795, Plan 5 £25,000) and 6% above £21,000 for a Postgraduate Loan, which is repaid alongside any undergraduate plan.
- Pension: we treat the percentage you enter as a workplace pension under a net pay arrangement, taken from gross pay before Income Tax but not before National Insurance or student loan repayments. Relief-at-source schemes give roughly the same result for basic-rate taxpayers; salary sacrifice also saves National Insurance, so it leaves slightly more take-home pay than we show.
- We do not model tax codes other than 1257L, the Marriage Allowance, the Blind Person's Allowance, benefits in kind, other income, Gift Aid or the High Income Child Benefit Charge.
- Stamp duty: we apply the residential rates for a single dwelling of Stamp Duty Land Tax (England and Northern Ireland), Land and Buildings Transaction Tax (Scotland) and Land Transaction Tax (Wales), including first-time buyer relief where it exists and the higher rates for additional properties. We do not model the 2% SDLT surcharge for non-UK residents, multiple dwellings, mixed-use or non-residential property, or leases with rent.
- We review the figures after every UK Budget, Scottish Budget and Welsh Budget, and when HMRC publishes the rates for the next tax year.

## Official sources
- [Rates and thresholds for employers 2026 to 2027 (HMRC, GOV.UK)](https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027)
- [Income Tax rates and allowances for current and previous tax years (HMRC)](https://www.gov.uk/government/publications/rates-and-allowances-income-tax/income-tax-rates-and-allowances-current-and-past)
- [Income Tax rates and Personal Allowances: income over £100,000 (GOV.UK)](https://www.gov.uk/income-tax-rates/income-over-100000)
- [Scottish Income Tax: rates and bands 2026 to 2027 (Scottish Government)](https://www.gov.scot/publications/scottish-income-tax-rates-and-bands/pages/2026-to-2027/)
- [Rates and allowances: National Insurance contributions (HMRC)](https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions)
- [Repaying your student loan: how much you repay (GOV.UK)](https://www.gov.uk/repaying-your-student-loan/what-you-pay)
- [Stamp Duty Land Tax: residential property rates (GOV.UK)](https://www.gov.uk/stamp-duty-land-tax/residential-property-rates)
- [Higher rates of Stamp Duty Land Tax (HMRC)](https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property)
- [LBTT residential property rates and bands (Revenue Scotland)](https://revenue.scot/taxes/land-buildings-transaction-tax/residential-property)
- [Land Transaction Tax rates and bands (Welsh Government)](https://www.gov.wales/land-transaction-tax-rates-and-bands)

---
ClearPayslip · Updated on 2026-10-22 · https://www.clearpayslip.com/methodology