Methodology

SalaryTools publishes information about UK tax and pay based on HMRC guidance and other primary government sources. Every number on this page comes from an official source, linked inline. We review this page against HMRC's latest figures every April when the new tax year starts, and at any point during the year that HMRC publishes a mid-year change.

If you spot a figure that looks wrong, email corrections@salarytools.co.uk and we'll check it and fix it.

Tax year the site is configured for

The default calculations on this site use the 2026/27 UK tax year (6 April 2026 to 5 April 2027). Where the calculator supports switching to earlier tax years (2024/25 and 2025/26), the same methodology applies — only the rates and thresholds change.

Income tax (England, Wales, and Northern Ireland)

We use the rUK bands and rates published by HMRC for 2026/27. The Personal Allowance is £12,570 and is frozen until the 2027/28 tax year.

Source: Income Tax rates and Personal Allowances — GOV.UK.

Personal Allowance taper

For adjusted net income above £100,000, the Personal Allowance reduces by £1 for every £2 over the threshold. It reaches zero at £125,140, which creates an effective 60% marginal rate (62% with National Insurance) between those two figures. Source: Adjusted net income — GOV.UK.

Scottish income tax

Scottish taxpayers (people whose main residence is in Scotland) pay different income tax rates and bands, set by the Scottish Parliament. National Insurance, dividends, and savings tax are not devolved and use rUK rates.

Source: Income Tax in Scotland — GOV.UK.

National Insurance (employee, Class 1)

We use the weekly Primary Threshold and Upper Earnings Limit published by HMRC, converted to annual figures (weekly × 52, or monthly × 12 depending on pay period).

Source: National Insurance rates and categories — GOV.UK.

For salary sacrifice calculations that show employer NI savings, we use the employer secondary rate of 15% with a £5,000 secondary threshold (both effective from April 2025). Source: Employer National Insurance changes — GOV.UK.

Student loan repayments

The calculator supports all five repayment plans. Thresholds for 2026/27:

Source: Repaying your student loan — GOV.UK.

Pension contributions

The calculator supports four pension contribution types: auto-enrolment, occupational (salary-based), salary sacrifice, and personal. For auto-enrolment, we use the qualifying earnings band of £6,240 to £50,270 (frozen for 2026/27) as the basis when that scheme is selected.

Salary sacrifice reduces gross pay before tax and NI are calculated, so the tax relief is effectively at your marginal rate, and employee NI is saved on the sacrificed amount. We model the full mechanic — income tax, employee NI, and optional employer NI pass-back.

Sources: Workplace pensions — GOV.UK, Salary sacrifice and the effects on PAYE — GOV.UK, Tax on your private pension contributions — GOV.UK.

Company car Benefit in Kind (BiK)

For salary sacrifice EV and company car calculations, we use the HMRC appropriate-percentage table. The pure electric rate for 2026/27 is 4%, rising to 5% in 2027/28, 7% in 2028/29, and 9% in 2029/30 under the current schedule. The full CO₂ and electric-range breakdown is in the salary sacrifice calculator's BiK rate reference table.

Source: Company car benefit in kind rates — GOV.UK.

Statutory redundancy pay

The redundancy calculator uses the age-banded week-multiplier method (0.5, 1, or 1.5 weeks' pay per year of service depending on age during that year), the statutory weekly pay cap (£751 Great Britain / £783 Northern Ireland for 2026/27), and the £30,000 tax-free limit on redundancy payments.

Sources: Redundancy pay — GOV.UK, Calculate your statutory redundancy pay — GOV.UK.

Assumptions the calculators make

Default calculator settings assume the following unless you change them:

• Tax code 1257L — the standard personal allowance code. If your employer operates a different code (for example because of company benefits, underpayments, or marriage allowance transfers), your actual deductions will differ.
• England, Wales, or Northern Ireland residence — unless you switch to Scotland, rUK bands and rates are applied.
• No benefits in kind beyond those you enter explicitly — the calculator does not assume a company car, medical insurance, or other taxable benefits unless you add them.
• Standard Class 1 NI category A — the default category for most employees. Other categories (for example B, C, H, M, V) use different rates and are not modelled.
• No blind person's allowance, marriage allowance, or other allowance adjustments unless the form field exists for it.
• Salary paid evenly across the tax year — we don't model mid-year salary changes, cumulative versus week-1 tax code operation, or one-off bonus PAYE quirks (the bonus tax calculator handles those separately).

How often we update

• Mandatory review every April — when a new tax year starts, every rate and threshold on this page is re-verified against HMRC and Scottish government publications, and the "last reviewed" date on every page is refreshed.
• Mid-year updates — whenever HMRC changes a rate or threshold mid-year (for example an emergency Budget), we apply the update and date-stamp it.
• Corrections — any number flagged as wrong by a reader or an internal check is reviewed within five working days and either confirmed, corrected, or explained publicly.

What this site is not

SalaryTools publishes general information based on HMRC guidance. We are not regulated by the FCA and do not provide personalised financial, tax, or legal advice. If you need regulated guidance on your circumstances — for example before making a pension decision, a company car decision, or a redundancy decision — the government-backed MoneyHelper service is a good starting point, or consult a qualified accountant or FCA-authorised adviser.

For information on how we run the site, see About SalaryTools.