How Netly Pay calculates take-home pay

Scope of the calculator

Netly Pay models annual employment income for the 2026/27 tax year. It supports England/Wales/Northern Ireland and Scotland, standard employee Class 1 NI, student-loan Plans 1/2/4/5, Postgraduate Loans, taxable cash bonuses and an optional salary-sacrifice pension illustration.

Calculation sequence

1. Combine salary and taxable bonus.
2. Apply the selected salary-sacrifice percentage.
3. Calculate the Personal Allowance, including the £100,000 taper.
4. Apply the relevant taxable-income Income Tax bands.
5. Estimate standard employee Class 1 NI using annualised monthly thresholds.
6. Estimate selected student/postgraduate loan deductions using annual thresholds.
7. Subtract modelled deductions from gross cash pay.

Why results can differ from a payslip

PAYE, NI and student-loan deductions normally operate by pay period. Tax codes, benefits, prior-year adjustments, multiple jobs, irregular bonuses, pension method and payroll rounding can all change an actual payslip. Netly Pay intentionally describes outputs as estimates.

Source hierarchy

We prefer primary official sources: GOV.UK/HMRC for UK tax, NI and student-loan rules, and the Scottish Government for Scottish Income Tax policy. Key rates are linked below and from relevant guides.

Editorial and corrections policy

Rate changes are checked against primary sources before being incorporated. Material calculation changes are regression-tested. If you spot a possible error, use the contact form and include the page, inputs used and expected result where possible. We prioritise calculation and source corrections over cosmetic changes.

Independence and funding

Netly Pay is an independent information and calculation website. It is not HMRC, a payroll provider, an employer, a lender or a regulated financial adviser. The site may display advertising or use commercial partnerships in future; those relationships do not change the calculator formulas.

Calculation conventions used in 2026/27

Income Tax is modelled annually using the standard Personal Allowance and the published marginal bands for the selected region. Employee NI is an annualised estimate based on the standard Category A monthly thresholds. Student-loan figures use the published annual thresholds for comparison, while actual payroll deductions are assessed by pay period. Pension contributions entered in the calculator are treated as salary sacrifice, so they reduce the modelled employment pay before Income Tax, employee NI and loan deductions.

What we deliberately do not model

Netly Pay does not currently reproduce individual tax codes, taxable benefits, Marriage Allowance, Blind Person's Allowance, multiple employments, director NI methods, non-standard NI category letters, Scottish savings/dividend tax, self-employment, company taxation, benefits interactions or every pension arrangement. These exclusions are stated so that an estimate is not presented as a payroll guarantee.

Verification standard

Tax-year inputs are checked against GOV.UK/HMRC primary guidance. Where a page discusses a future announced change, it is labelled as future policy rather than silently built into the current-year calculator. Material corrections should be reflected in both the relevant guide and calculation code.