What's the difference between gross and net salary UK?

Gross salary is your total pay before any deductions. Net salary (take-home pay) is what actually reaches your bank account after tax, National Insurance, pension contributions, and other deductions. Gross is always higher than net.

Is salary usually quoted gross or net UK?

Job salaries in the UK are almost always quoted as gross (before tax). When you see '£35,000 salary', that's gross. Your actual take-home pay will be lower after deductions. Always check, but assume gross unless stated otherwise.

How do I calculate net from gross salary UK?

Subtract: Income Tax (based on tax bands), National Insurance (12% on earnings £12,570-£50,270, 2% above), pension contributions, and any other deductions like student loans. Online calculators can do this quickly.

Why does my net pay change month to month?

Common reasons: bonus affecting tax, Student loan threshold, reaching higher tax band mid-year, pension contributions changing, tax code adjustments, benefits in kind, or pay date timing across months.

Gross vs Net Income Explained UK

Understanding gross vs net helps you budget accurately and understand your payslip.

Read more: See our Salary By Profession guide for a complete overview of this topic.

Basic Definition

Gross Pay

What It Is	Details
Total pay	Before deductions
Includes	Base salary + bonuses
Headline figure	Job adverts use this
Your “salary”	In contracts

Net Pay

What It Is	Details
Take-home pay	What you actually receive
After	All deductions
In your bank	Each payday
Spending money	What you have

Simple Example

Element	Amount
Gross monthly	£3,000
Income Tax	-£400
National Insurance	-£200
Pension	-£150
Net pay	£2,250

What’s Deducted

Typical Deductions

Deduction	What It Is
Income Tax	Tax on earnings
National Insurance	Contributions to state benefits
Pension	Workplace pension
Student Loan	If applicable
Other	Childcare vouchers, unions, etc.

Income Tax 2025/26

Band	Taxable Income	Rate
Personal Allowance	£0 - £12,570	0%
Basic Rate	£12,571 - £50,270	20%
Higher Rate	£50,271 - £125,140	40%
Additional Rate	Over £125,140	45%

National Insurance 2025/26

Earnings	Rate
Below £12,570	0%
£12,570 - £50,270	12%
Above £50,270	2%

Student Loan

Plan	Threshold	Rate
Plan 1	£24,990	9%
Plan 2	£27,295	9%
Plan 4	£31,395	9%
Plan 5	£25,000	9%
Postgrad	£21,000	6%

Example Calculations

£30,000 Gross Salary

Element	Annual	Monthly
Gross salary	£30,000	£2,500
Income Tax	-£3,486	-£290
National Insurance	-£2,092	-£174
Net (no pension)	£24,422	£2,035

With 5% Pension

Element	Annual	Monthly
Gross salary	£30,000	£2,500
Pension (5%)	-£1,500	-£125
Taxable	£28,500	-
Income Tax	-£3,186	-£266
National Insurance	-£1,912	-£159
Net	£23,402	£1,950

£50,000 Gross Salary

Element	Annual	Monthly
Gross salary	£50,000	£4,167
Income Tax	-£7,486	-£624
National Insurance	-£4,492	-£374
Net (no pension)	£38,022	£3,168

£75,000 Gross Salary

Element	Annual	Monthly
Gross salary	£75,000	£6,250
Income Tax	-£17,486	-£1,457
National Insurance	-£4,992	-£416
Net (no pension)	£52,522	£4,377

Quick Reference Table

Annual Gross to Net (No Pension)

Gross	Income Tax	NI	Net	Monthly Net
£20,000	£1,486	£892	£17,622	£1,469
£25,000	£2,486	£1,492	£21,022	£1,752
£30,000	£3,486	£2,092	£24,422	£2,035
£35,000	£4,486	£2,692	£27,822	£2,319
£40,000	£5,486	£3,292	£31,222	£2,602
£45,000	£6,486	£3,892	£34,622	£2,885
£50,000	£7,486	£4,492	£38,022	£3,168
£60,000	£11,486	£4,692	£43,822	£3,652
£70,000	£15,486	£4,892	£49,622	£4,135

Reading Your Payslip

Gross Section

Shows	Meaning
Basic pay	Monthly salary
Overtime	Extra hours if applicable
Bonuses	One-off payments
Gross pay	Total before deductions

Deductions Section

Shows	Meaning
PAYE tax	Income tax via employer
NI	National Insurance
Pension	Your contribution
Student loan	If applicable
Other	Various

Net Pay Section

Shows	Meaning
Net pay	Your take-home
Bank credit	What’s paid
Year to date	Cumulative figures

Why Gross Matters

When Gross Is Used

Situation	Uses Gross
Job salaries	Always
Tax returns	Declared income
Mortgage applications	Affordability
Benefit calculations	Some use gross
Pension calculations	Often

Mortgage Example

Lender Check	Based On
Income multiple	Gross salary
4.5 × £50,000	= £225,000 max
Not	Net salary

Why Net Matters

When Net Is Used

Situation	Uses Net
Budgeting	What you spend
Rent affordability	What you have
Monthly planning	Actual cash
Comparing jobs	Real impact

Comparing Job Offers

Job A	Job B
£35,000 gross	£38,000 gross
London	Manchester
Looks worse	Looks better

After Analysis	Job A	Job B
Net pay	£27,822	£29,400
Rent	-£1,200	-£700
Commute	-£200	-£100
Disposable	£1,230/m	£2,000/m

Tax Codes

What They Mean

Code	Meaning
1257L	Standard (£12,570 allowance)
BR	All taxed at basic rate
0T	No allowance
K codes	You owe tax

Affects Net Pay

Wrong Tax Code	Impact
Too high	Pay too little tax
Too low	Pay too much tax
Check payslip	Regularly
Query HMRC	If wrong

Self-Employment

Different Calculation

Employed	Self-Employed
Deducted by employer	Pay yourself
Monthly PAYE	Quarterly/annual
Regular	Variable
Net is clear	Must calculate

Self-Employed Must

Action	Why
Track gross income	All earnings
Calculate deductions	Yourself
Set aside	For tax bills
Budget on net	After putting tax aside

Summary

Term	Meaning
Gross	Before deductions
Net	After deductions (take-home)
Always quoted	Gross in job adverts
Budget with	Net

Quick Formula
Gross salary	£_____
Less: Tax	-£_____
Less: NI	-£_____
Less: Pension	-£_____
Less: Other	-£_____
Net pay	£_____