Payroll Calculator — UK PAYE & NI

A full UK payroll calculation applies deductions in a specific order: gross pay, less salary sacrifice pension contributions, then PAYE income tax using the employee's tax code, then employee National Insurance, then net-pay pension contributions (if not salary sacrifice), and finally student loan or postgraduate loan repayments.

PAYE operates on a cumulative basis throughout the tax year. Each pay period, your employer calculates your year-to-date tax-free allowance and compares it with your year-to-date earnings. This means overpayments in one period are corrected in subsequent periods without needing to wait until the end of the year.

This calculator supports weekly, fortnightly, four-weekly and monthly pay periods. Enter the gross pay, tax code, pension type, student loan plan and any additional deductions to generate a payslip-style breakdown showing each deduction line and the net pay figure.

UK PAYE deductions 2026/27. Income tax bands: 0% to £12,570 personal allowance; 20% to £50,270; 40% to £125,140; 45% above £125,140. National Insurance Class 1 employee: 8% on £12,570-£50,270; 2% above. Employer NI Class 1: 15% above £5,000 (Secondary Threshold, lowered April 2025 from £9,100). Plus: student loan repayments, pension contributions, salary sacrifice items, attachment of earnings orders. Total deductions: typically 20-35% of gross pay for typical UK employee.

Tax codes — what they mean. 1257L = standard 2026/27 tax code: £12,570 personal allowance. K codes (e.g. K475): negative allowance — typically because of taxable benefits (company car, accommodation) exceeding personal allowance. BR: basic rate (20% on all earnings) — usually for second jobs. 0T: emergency tax code, no personal allowance applied. NT: no tax (rare). M/N: Marriage Allowance recipient/transferor. S prefix: Scottish taxpayer. C prefix: Welsh taxpayer (devolved rates same as English currently but separate administration).

Employer payroll costs beyond salary. Total cost of employment: gross salary + 15% employer NI + ~5-8% pension auto-enrolment + holiday pay + sick pay + benefits (private medical, company car, gym). Sample: £30,000 gross salary = ~£36,000+ total employment cost. Self-employed equivalent: own £30k profit + £30k NI/tax/holiday = need £42k+ revenue. Employer pension auto-enrolment: minimum 3% employer + 5% employee = 8% of qualifying earnings (£6,240-£50,270 bands). Employment Allowance £10,500/year reduces employer NI for eligible small businesses.

Payslip — what every UK employee should check. Mandatory items: gross pay, tax code, deductions itemised, net pay, year-to-date totals. Verify: tax code correct (check P60); NI category (A standard, M for under 21, V veterans relief); pension deduction matches enrolment; holiday pay accrued. Salary sacrifice items: shown as reduction from gross (not deduction from net) — saves tax and NI on amount. P60 issued by 31 May after tax year ends: annual summary. P11D: details benefits in kind (company car, private medical) — keep for Self Assessment.

Common payroll issues and corrections. Wrong tax code: phone HMRC 0300 200 3300 with NI number, employer reference — fix takes 1-2 weeks. Underpaid tax: HMRC adjusts via tax code (collected over future months) OR Simple Assessment. Overpaid tax: refund via P800 (after year end) or via current tax code. Late P60: ask employer (mandatory by 31 May). RTI (Real Time Information) since 2013: employers report to HMRC on/before each pay date — failures result in HMRC fines £100-£400+.