Your net salary (take-home pay) is what you receive after income tax and National Insurance deductions. In the UK, the overall deduction rate typically ranges from 20% to 40% depending on your income band.
The basic formula
Net salary = Gross salary - Income Tax - National Insurance
Quick estimate: £40,000 gross − ~£7,500 tax − ~£3,500 NI ≈ £29,000 net (£2,417/month)
UK deductions breakdown (2024/25)
| Deduction | Rate |
|---|---|
| Income Tax (basic rate) | 20% on earnings £12,570–£50,270 |
| Income Tax (higher rate) | 40% on earnings £50,270–£125,140 |
| National Insurance (employee) | 8% on earnings £12,570–£50,270 |
| National Insurance (employee) | 2% above £50,270 |
| Personal Allowance (tax-free) | £12,570 |
Worked example: £45,000 gross
| Component | Amount |
|---|---|
| Gross salary | £45,000 |
| Personal Allowance | − £0 (already applied) |
| Taxable income | £45,000 − £12,570 = £32,430 |
| Income Tax (20%) | − £6,486 |
| National Insurance (8%) | − £2,594 |
| Net salary | ~£35,920 / year |