Based on a standard tax code (1257L) for the 2025/2026 tax year.
If you earn £18,000 a year, you will pay £1,086 in Income Tax and £434 in National Insurance. This results in a net take-home pay of £16,480 per year.
| Frequency | Gross Income | Taxable Inc. | Income Tax | National Ins. | Take Home |
|---|---|---|---|---|---|
| Annual | £18,000.00 | £5,430.00 | £1,086.00 | £434.00 | £16,480.00 |
| Monthly | £1,500.00 | £452.50 | £90.50 | £36.17 | £1,373.33 |
| Weekly | £346.15 | £104.42 | £20.88 | £8.35 | £316.92 |
| Daily | £69.23 | £20.88 | £4.18 | £1.67 | £63.38 |
*Calculations assume a standard 1257L tax code and Class 1 National Insurance at 8%.
Adjust your details below to see how pension contributions, student loans, or overtime might affect your £18k salary.
In the UK, every individual has a Personal Allowance. For the 2025/2026 tax year, this is typically £12,570. This means the first £12,570 you earn is completely tax-free.
For a salary of £18,000, your taxable income is calculated as:
This taxable amount is charged at the Basic Rate of 20%. Therefore:
£5,430 × 20% = £1,086 (Total Income Tax).
National Insurance (NI) is calculated separately. You typically start paying NI when you earn above the primary threshold, which aligns with the personal allowance at £12,570 per year (or £1,048 per month).
The rate for Class 1 NI employees is 8% on earnings between £12,570 and £50,270.
These deductions are usually made automatically through PAYE (Pay As You Earn) by your employer.
To understand the value of an £18,000 salary in 2026, we must compare it against the National Living Wage (Minimum Wage) and the cost of living.
The National Living Wage typically increases every April. Assuming a minimum wage in the region of £12.21 per hour for 2025/26:
Since £18,000 is significantly lower than £23,809, an £18,000 salary typically indicates one of the following scenarios:
If you are an apprentice or under the age of 21, the minimum wage rates are lower. For example, if the rate for 18-20 year olds is around £8.60 - £10.00, an £18,000 salary would be compliant for a full-time role. Always check your payslip to ensure you are being paid at least the legal hourly minimum for your age group.
For many households, an annual income of £18,000 may trigger entitlement to state support, particularly Universal Credit (UC).
Universal Credit is means-tested. If you are employed, your UC payment reduces gradually as you earn more. This is known as the "taper rate," which is currently 55%.
This means for every £1 you earn (net), your Universal Credit reduces by 55p. However, if you have children or limited capability for work, you may have a "Work Allowance" — an amount you can earn before your UC starts to reduce.
With a monthly take-home pay of £1,373, you should use an online benefits calculator to check if you are eligible for top-ups to help with rent or living costs.
Managing a budget on £1,373 per month requires careful planning. Here is a hypothetical allocation of funds for a single person living in a shared accommodation outside of London:
As this breakdown shows, margins can be tight. It is vital to review outgoings regularly.
You will receive approximately £1,373 per month. This assumes you have a standard tax code and no student loan deductions.
Ideally, no. The repayment threshold for Plan 1 is over £22,000, and for Plan 2 it is over £27,000. Plan 5 (for courses starting after Aug 2023) has a threshold of £25,000. Since £18,000 is below all these thresholds, you should not see any student loan deductions.
At current minimum wage rates, £18,000 is almost certainly a part-time salary for an adult (approx 28 hours/week). If you are working 37+ hours a week for £18k, you may be underpaid unless you are an apprentice or under 21.
If you work 37.5 hours a week, the hourly rate is roughly £9.23. If you work 40 hours a week, it is £8.65. Compare this to your age group's minimum wage to ensure compliance.
Our calculation shows Net pay before pension. Under auto-enrolment, you will likely contribute 5% of your qualifying earnings into a workplace pension. This would reduce your monthly take-home by roughly £30-£40, but your employer adds 3% on top.
The tax and National Insurance rates are similar but paid differently. You would pay Class 4 National Insurance (6%) and Class 2 (if applicable, though currently abolished/reformed). The Income Tax remains 20% on profits above £12,570.
To increase take-home pay from £18k, you could look for overtime opportunities, ensure you are claiming the Marriage Allowance (if your spouse earns less than £12,570), or review your tax code for errors (e.g., claiming for uniform laundry or professional fees).
A £18,000 salary sits below the UK average of £35,600 (49% lower). That said, affordability depends heavily on where you live — in many parts of the North, Midlands, Wales and Scotland, £18,000 covers a comfortable lifestyle. Your annual take-home of £16,480 (£1,373/month) will stretch much further outside of London and the South East. For context, the National Living Wage in 2025/26 is £12.21/hour (£23,432 full-time), so £18,000 is near that floor.
For reference: your annual take-home from £18,000 is £16,480, which breaks down as £1,373 per month or approximately £317 per week. You pay £1,086 in income tax and £434 in National Insurance contributions in 2025/26.
Based on a monthly take-home of £1,373, here is a typical budget breakdown for someone living outside London. London rents average £1,500–£2,000/month for a one-bedroom flat, which would significantly reduce the discretionary column below.
| Expense | Monthly Estimate | % of Take-Home |
|---|---|---|
| Rent / mortgage (outside London) | £750 | 55% |
| Groceries & dining | £350 | 25% |
| Transport (car/public) | £150 | 11% |
| Utilities, broadband & phone | £130 | 9% |
| Remaining (savings/leisure) | £-7 | -1% |
Estimates are indicative averages for 2025/26. Actual costs vary by location, lifestyle and household size.
Making pension contributions via salary sacrifice reduces your taxable income, lowering both the income tax and National Insurance you pay. The table below shows how different contribution rates affect your monthly take-home from a £18,000 salary:
| Pension Contribution | Monthly Take-Home |
|---|---|
| 0% (£0/year) | £1,373/month |
| 3% (£540/year) | £1,341/month |
| 5% (£900/year) | £1,319/month |
| 8% (£1,440/year) | £1,287/month |
| 10% (£1,800/year) | £1,265/month |
Calculated using salary sacrifice (pre-tax). The minimum auto-enrolment contribution is 5% employee + 3% employer (8% total) from April 2025. Higher contributions are particularly tax-efficient if you earn above £50,270 or in the £100,000–£125,140 band.
Compare your take-home with nearby salary levels: