Where the money goes
| Year | Month | Week | |
|---|---|---|---|
| Salary | £40,000 | £3,333 | £769 |
| Income Tax | £5,486 | £457 | £106 |
| National Insurance | £2,194 | £183 | £42 |
| Take-home pay | £32,320 | £2,693 | £622 |
Out of every £100 you earn, you keep about £81. Your payslip may differ by a few pounds because payroll works each pay period separately.
Income Tax band by band
The first £12,570 is your tax-free Personal Allowance. Income Tax is charged on the remaining £27,430.
| Band | Rate | Income in band | Tax |
|---|---|---|---|
| Tax-free allowance | 0% | £12,570 | £0 |
| Basic rate | 20% | £27,430 | £5,486 |
National Insurance
Employees pay Class 1 National Insurance of 8% on earnings between £12,570 and £50,270 a year, and 2% above that. On £40,000 that comes to £2,194 a year, or £183 a month. National Insurance is the same in every part of the UK, and you stop paying it once you reach State Pension age.
£40,000 after tax in Scotland
Scotland sets its own Income Tax bands. On £40,000 a Scottish taxpayer pays £5,551 Income Tax and takes home £32,255 a year (£2,688 a month), £65 less than in the rest of the UK.
| Band | Rate | Income in band | Tax |
|---|---|---|---|
| Tax-free allowance | 0% | £12,570 | £0 |
| Starter rate | 19% | £3,967 | £754 |
| Basic rate | 20% | £12,989 | £2,598 |
| Intermediate rate | 21% | £10,474 | £2,200 |
With a pension or student loan
Most employees pay into a workplace pension, and many repay a student loan. This is how they change take-home pay on £40,000. A salary sacrifice pension is taken before tax and National Insurance, so it costs you less than its face value.
| Pension | Student loan | Take-home a year | A month | |
|---|---|---|---|---|
| No pension or student loan | £0 | £0 | £32,320 | £2,693 |
| 5% pension by salary sacrifice | £2,000 | £0 | £30,880 | £2,573 |
| Plan 2 student loan | £0 | £955 | £31,364 | £2,614 |
| Plan 5 student loan | £0 | £1,350 | £30,970 | £2,581 |
| 5% pension and Plan 2 loan | £2,000 | £775 | £30,104 | £2,509 |
Your tax rates
You are a basic rate taxpayer. Each extra £100 of salary costs you 28% in Income Tax and National Insurance (20% tax and 8% NI), so you keep about £72.
Per hour, day and week
| Before tax | After tax | |
|---|---|---|
| Per hour (37.5 hours a week) | £20.51 | £16.57 |
| Per day (5 days a week) | £153.85 | £124.31 |
| Per week | £769 | £622 |
| Per month | £3,333 | £2,693 |
Nearby salaries
| Salary | Take-home a year | A month |
|---|---|---|
| £37,000 after tax | £30,160 | £2,513 |
| £38,000 after tax | £30,880 | £2,573 |
| £39,000 after tax | £31,600 | £2,633 |
| £40,000 | £32,320 | £2,693 |
| £41,000 after tax | £33,040 | £2,753 |
| £42,000 after tax | £33,760 | £2,813 |
| £43,000 after tax | £34,480 | £2,873 |
See every salary from £15,000 to £250,000, or work out any figure with the salary calculator.