How does HMRC calculate my tax?

HMRC calculates your tax using the Pay As You Earn (PAYE) system. They use your tax code to determine your tax-free Personal Allowance. Your income above this allowance is then taxed according to the UK's income tax bands. Our calculator simulates this process to give you an accurate estimate.

A tax code is used by your employer or pension provider to work out how much Income Tax to take from your pay. The most common code for 2026/27 is 1257L, which means you have the standard tax-free Personal Allowance of £12,570. A different code means you may have other allowances or deductions.

Why is my tax code wrong?

Your tax code can be wrong if you've changed jobs, started receiving a second income, or if HMRC doesn't have your correct employment details. If you think your tax code is wrong, you should contact HMRC to get it corrected to avoid over or underpaying tax.

Am I due a tax refund?

You may be due a tax refund if you paid too much tax in a previous year. This often happens if you were on the wrong tax code or didn't work for a full tax year. You can check your tax history on your HMRC personal tax account and claim a refund if one is owed.

How is National Insurance calculated?

National Insurance is calculated based on your earnings in each pay period (weekly or monthly). You pay a percentage on earnings between the Primary Threshold and the Upper Earnings Limit. Use our dedicated National Insurance calculator for a detailed breakdown.

Logic Verified: 2026/27 HMRC PAYE Framework

HMRC Tax Simulation & Estimator

An easy-to-use tax calculator to estimate your PAYE, National Insurance, and net take-home pay for the 2026/27 tax year, just like HMRC.

Salary & Pay

Your Income

Pay Period

Annual Bonus (Optional)

Salary Sacrifice

Overtime

Overtime Pay

Overtime Period

Enter any overtime pay you receive regularly or as a one-off payment.

Tax & Pension

Tax Year

Pension Contribution (%)

Pension Scheme Type

Net Pay

Taken from gross pay before income tax. (Common in traditional workplace schemes)

Qualifying Earnings Only?

Tax code

Marriage Allowance?

Resident in Scotland?

Student Loan

Student Loan Plan

Select the student loan plan you are on. This will be used to calculate your monthly repayments. Not sure which plan you're on? Check our student loan guide.

Childcare & Child Benefit

Monthly Childcare Costs

Using Tax-Free Childcare scheme?

Child Benefit

Children claimed for

Only select 1 if you are the main claimant.

Additional children

Any other children you claim for.

If your (or your partner's) adjusted net income is over £60,000, you may have to pay the High Income Child Benefit Charge. Our calculator will estimate this.

Benefits & Allowances

Monthly value of company benefits

Monthly cash allowances

Additional Options

Allowances

I do not pay National Insurance

Eligible for Blind Person's Allowance

Married Couple's Allowance

Wait, can I add Marriage Allowance?

Transfer £1,260 of Personal Allowance from spouse.

Charitable Donations (Monthly)

Payroll Giving (Before Tax)

Gift Aid (After Tax)

Audit Mode

HMRC Compliance Active

LIVE SYNC: 2026/27

Your Results

A breakdown of your income and deductions for the 2026/27 tax year.

Estimated Take-Home Pay

£37,519.60

Take-Home
£37,519.60
Tax
£6,986.00
NI
£2,994.40
Pension
£2,500.00

Gross Pay	£50,000.00
Income Tax	-£6,986.00
National Insurance	-£2,994.40
Pension Contribution	-£2,500.00

Breakdown	annually	monthly	weekly	daily	hourly
Gross Pay	£50,000.00	£4,166.67	£961.54	£192.31	£25.64
Taxable Income	£34,930.00	£2,910.83	£671.73	£134.35	£17.91
Income Tax	£6,986.00	£582.17	£134.35	£26.87	£3.58
National Insurance	£2,994.40	£249.53	£57.58	£11.52	£1.54
Employer NI (Cost to Business)	£6,750.00	£562.50	£129.81	£25.96	£3.46
Pension	£2,500.00	£208.33	£48.08	£9.62	£1.28
Take-Home Pay	£37,519.60	£3,126.63	£721.53	£144.31	£19.24

How Your Pay is Calculated

Our UK income tax calculator follows HMRC's Pay As You Earn (PAYE) system to give you an accurate estimate. Here’s a breakdown of what's included and how it works.

1. Your Tax-Free Allowance

The process starts with your Personal Allowance (usually £12,570), which is the amount you can earn tax-free. Our calculator adjusts this based on your tax code and income, just like the official HMRC tax calculator.

2. Income Tax Deductions

Your earnings above the allowance are taxed in bands. Our calculator uses the latest UK and Scottish tax bands to calculate the correct amount of income tax.

3. National Insurance & More

We then deduct National Insurance, student loan, and pension contributions to give you your final take-home pay. This comprehensive approach makes it a reliable after tax calculator for the UK.

Example: Tax on £50,000 Salary UK

Here's how your tax is calculated on a £50,000 salary (assuming standard 1257L tax code):

Personal Allowance: The first £12,570 is not taxed.

Basic Rate Tax: The income from £12,571 to your £50,000 salary (£37,429) is taxed at 20%. Tax: £7,485.80.

National Insurance: Calculated at 8% on earnings between £12,570 and your £50,000 salary (which falls just below the £50,270 Upper Earnings Limit). NI: £2,994.40.

Total Deductions: £10,480.20. Your take-home pay is £39,519.80 (before other deductions like pension).

HMRC Digital Services Guide

While our calculator provides an instant estimate, we recommend connecting with HMRC's official digital infrastructure for real-time adjustments to your tax code.

Personal Tax Account (PTA)

The "hub" for your UK financial identity. Use it to check your State Pension forecast and view your 5-year tax history.

HMRC Official App

Available on iOS and Android. Excellent for tracking "Self Assessment" deadlines and claiming refunds while on the go.

2026/27 HMRC Compliance Checklist

Verify your 1257L tax code at the start of April.
Update your estimated income if you earn >£100k (Tax Trap).
Ensure student loan plan matches your graduation era.
Notify HMRC of any secondary "P11D" medical benefits.

Explore HMRC Topics

Use our other calculators to deep-dive into specific UK taxes and financial planning.