METHOD
How the calculator stacks a packet
Updated 12 November 2026 · Tax year 2026/27
Take-Home Lab runs an annual PAYE-style stack in the browser. Nothing you type is sent to Rodway Labs. The result is an illustration with the assumptions below, not a figure you can file or budget from without checking a real payslip.
How this is calculated — at a glance
- Annual PAYE-style stack. The calculator works on the whole tax year: gross pay, minus any modelled pension, then income tax, employee National Insurance and student loans. Real payroll does the same sums each pay period.
- Personal allowance taper. The £12,570 allowance falls by £1 for every £2 of income above £100,000 and is gone at £125,140, which makes the effective income tax rate 60% in that band.
- Scottish bands. If you choose Scotland, income tax uses the six 2026/27 Scottish bands (19%, 20%, 21%, 42%, 45%, 48%). National Insurance and student loans do not change.
- National Insurance. Employee Class 1 at 8% between £12,570 and £50,270, then 2%, modelled on the year.
- Student loan thresholds. Plan 1 £26,900, Plan 2 £29,385, Plan 4 £33,795 and Plan 5 £25,000, each at 9% above the threshold; postgraduate loan 6% above £21,000. One undergraduate plan, plus a Postgraduate Loan at the same time if selected.
- Salary sacrifice. Sacrificed pay comes off gross before both income tax and NI. A net pay pension comes off before income tax only.
- Sources. HMRC, GOV.UK and the Scottish Government, listed in Sources below and checked for 2026/27.
Order of the stack
- Start from gross annual pay (salary, or hourly rate × hours × paid weeks).
- Apply pension treatment if selected: net pay reduces taxable pay only; salary sacrifice comes off gross pay before anything else, so it reduces taxable pay, NI-able earnings and the pay used for student loans.
- Income tax on taxable pay after the personal allowance (and Scottish bands where chosen).
- Employee Class 1 National Insurance on NI-able earnings for the year.
- Student loans, if selected: one undergraduate plan at 9% above its threshold, plus a Postgraduate Loan at 6% above £21,000 when ticked.
- Take-home = gross − tax − NI − loans − any net pay pension contribution. A salary-sacrifice contribution is not taken off again here, because it already came off gross pay in step 2.
Income tax
England, Wales and Northern Ireland use the main rates: 20% on taxable pay up to £37,700, 40% to £125,140, 45% above. The standard personal allowance is £12,570, reduced by £1 for every £2 of income above £100,000 (gone at £125,140). Scotland uses the 2026/27 Scottish bands on non-savings, non-dividend income. The model assumes a 1257L-style allowance unless the taper applies.
National Insurance
Employee Class 1 is modelled on the year: 8% between £12,570 and £50,270, then 2%. Real payroll calculates National Insurance each pay period. A bonus month, short weeks or irregular overtime can therefore differ from this annual stack.
Student loans
One undergraduate plan (Plan 1, 2, 4 or 5) at 9% above its 2026/27 HMRC threshold, and optionally a Postgraduate Loan at the same time. HMRC deducts both from the same pay, each against its own threshold: on £35,000 with Plan 2 and a Postgraduate Loan that is £505.35 plus £840.00, £1,345.35 a year. Postgraduate loan at 6% above £21,000. Plan 5 is modelled as the plan for English undergraduate courses starting on or after 1 August 2023, threshold £25,000. Two undergraduate plans together are not modelled: HMRC then takes a single 9% deduction above the lower threshold, so choose the plan with the lower threshold.
Pension
A percentage of gross. Net pay reduces taxable pay, not NI, in this model. Salary sacrifice reduces both. Relief at source is not modelled. The employer booklet decides which design a scheme actually is.
Thresholds used for 2026/27
These are the exact values in js/tax.js. Income tax bands are applied to taxable pay after the personal allowance; the band rows below show the equivalent gross income for someone with the standard £12,570 allowance.
| Item | Value | Rate |
|---|---|---|
| Personal allowance | £12,570 | 0% |
| Allowance taper | £100,000 to £125,140 | £1 lost per £2 |
| rUK basic rate | £12,571 to £50,270 | 20% |
| rUK higher rate | £50,271 to £125,140 | 40% |
| rUK additional rate | over £125,140 | 45% |
| Scottish starter | £12,571 to £16,537 | 19% |
| Scottish basic | £16,538 to £29,526 | 20% |
| Scottish intermediate | £29,527 to £43,662 | 21% |
| Scottish higher | £43,663 to £75,000 | 42% |
| Scottish advanced | £75,001 to £125,140 | 45% |
| Scottish top | above £125,140 | 48% |
| NI primary threshold to upper earnings limit | £12,570 to £50,270 | 8% |
| NI above upper earnings limit | above £50,270 | 2% |
| Plan 1 student loan | above £26,900 | 9% |
| Plan 2 student loan | above £29,385 | 9% |
| Plan 4 student loan | above £33,795 | 9% |
| Plan 5 student loan | above £25,000 | 9% |
| Postgraduate loan | above £21,000 | 6% |
Scroll sideways to see the whole table →
Salary sacrifice treatment
With salary sacrifice, you agree a lower cash salary and your employer pays the difference into your pension. The model takes the sacrificed percentage off gross before income tax, National Insurance and the student loan calculation, so all three fall. With a net pay arrangement, the contribution comes off before income tax only; NI and student loan are worked on the full salary. Employer contributions, any employer NI saving passed on to you, and the National Minimum Wage floor are outside the model. HMRC explains the rules in salary sacrifice and the effects on PAYE.
Worked check — £35,000 England, no pension, no loan
- Taxable pay after £12,570 allowance: £22,430
- Income tax at 20%: £4,486.00
- Employee NI at 8% on £22,430: £1,794.40
- Take-home: £28,719.60 a year (£2,393.30 a month)
The same figures appear on the £35,000 take-home guide and the pay-rise guide. If your result differs, check region, pension and loan toggles first.
How we checked the figures
Every rate and threshold in js/tax.js is compared line by line with the official 2026/27 sources below. Each guide’s £ figures are then generated by the same engine as the calculator and cross-checked by hand, band by band. A second check, for Scotland:
Worked check — £45,000 Scotland, no pension, no loan
- Starter 19% on £3,967 (£12,571 to £16,537): £753.73
- Basic 20% on £12,989 (£16,538 to £29,526): £2,597.80
- Intermediate 21% on £14,136 (£29,527 to £43,662): £2,968.56
- Higher 42% on £1,338 (£43,663 to £45,000): £561.96
- Scottish income tax: £6,882.05 · employee NI 8% × £32,430: £2,594.40
- Take-home: £35,523.55 a year (£2,960.30 a month)
Worked check — £40,000 England with Plan 2
- Income tax 20% × £27,430: £5,486.00 · NI 8% × £27,430: £2,194.40
- Plan 2: 9% × (£40,000 − £29,385) = 9% × £10,615 = £955.35
- Take-home: £31,364.25 a year (£2,613.69 a month)
Known changes for 2027/28 (from 6 April 2027)
The calculator stays on 2026/27 until the new tax year. What is already announced, as at 12 November 2026:
- Income tax and employee NI (England, Wales, Northern Ireland): the Budget on 28 October 2026 left the rates unchanged. The £12,570 personal allowance, the £50,270 higher-rate threshold and the NI thresholds stay frozen; the freeze runs to April 2031.
- Scotland: 2027/28 Scottish bands are set at the Scottish Budget and are not published yet. Scottish figures here stay on 2026/27 until they are.
- Plan 2 student loan: the £29,385 threshold is frozen for three years from April 2027. Plan 1, Plan 4 and Plan 5 thresholds for 2027/28 will be checked when HMRC publishes them.
- National Living Wage: rises by 3.9% from 1 April 2027.
- Savings and property income: tax rates on these rise from April 2027. The calculator only models employment income, so this does not change its results.
- Salary sacrifice: from April 2029 only the first £2,000 a year of pension contributions made by salary sacrifice will be free of National Insurance.
Sources
- HMRC — Rates and thresholds for employers 2026 to 2027 (personal allowance, NI thresholds and rates, student loan thresholds)
- GOV.UK — Income Tax rates and Personal Allowances
- GOV.UK — Income Tax in Scotland: current rates
- Scottish Government — Scottish Income Tax rates and bands 2026 to 2027
- GOV.UK — Repaying your student loan: what you pay
- GOV.UK — National Insurance: how much you pay
- HMRC — Salary sacrifice and the effects on PAYE
Left out
Other tax codes, marriage allowance, blind person’s allowance, the High Income Child Benefit Charge, savings and dividends, company benefits, court orders, payroll giving, Scottish starter/higher interactions beyond the published bands, and employer National Insurance.
Why a guide can disagree with a payslip
- Your tax code is not 1257L, or you have a week-1 / month-1 basis.
- National Insurance was calculated that pay period, not as an annual average.
- You have two undergraduate plans, or a loan deduction triggered in a single high-paid month (loans are worked out each pay period).
- Pension is salary sacrifice on the payslip but net pay in the model (or the reverse).
Related: glossary · guides · calculator · disclaimer
Sources: HMRC rates and thresholds for employers 2026 to 2027; Scottish Government Scottish Income Tax 2026 to 2027.