Frequently Asked Questions
What is the difference between gross pay and net pay?
Gross pay is your total salary before any deductions. Net pay (also called take-home pay) is what you actually receive after income tax, National Insurance, and any pension contributions are deducted. For example, a £35,000 gross salary gives approximately £27,868 net pay in 2025/26.
How does pension contribution affect my net pay?
Pension contributions reduce your taxable income, which means you pay less income tax. If you contribute 5% of a £35,000 salary (£1,750), your taxable income drops to £33,250, saving you £350 in tax at the basic rate. This is called tax relief and is one of the key benefits of pension saving.
What are the UK tax bands for 2025/26?
For 2025/26, the UK tax bands are: Personal Allowance of £12,570 (0% tax), Basic Rate of 20% on income from £12,571 to £50,270, Higher Rate of 40% from £50,271 to £125,140, and Additional Rate of 45% on income above £125,140. The Personal Allowance reduces by £1 for every £2 earned over £100,000.