Your Pay Explained

Gross is the headline salary; net ("take-home") is what lands after Income Tax, National Insurance and pension. Example: Sarah earns £28,000. After her Personal Allowance she pays 20% tax on £15,430 and 8% NI on the slice above £12,570, leaving take-home of roughly £23,800/yr — about £1,983/month before pension.

Bands for 2026/27: 0% to £12,570, 20% to £50,270, 40% to £125,140, 45% above. These bands are frozen to 2031, so pay rises quietly cost more in tax over time — that's "fiscal drag".

Employee Class 1 NI is 8% on earnings between £12,570 and £50,270, then 2% above. NI buys your State Pension and some benefits; earning above the Lower Earnings Limit (£129/wk) credits your record even when you pay nothing.

1257L means £12,570 tax-free spread across the year. Watch for BR (everything taxed at basic — common on a second job), 0T, K codes, and "emergency" codes after a job change.

Employer NI (15% above the £5,000 secondary threshold) and pension contributions are real costs of employing you — useful context when you negotiate a salary or weigh up a salary-sacrifice pension.