Where your money actually goes
No jargon. Put your pay in and watch it split up, then read what every word on your payslip means.
Before anything comes off. A rough figure is fine.
Leave it at nought if none. Watch what happens to the tax when you move it.
You keep
£28,720
About £2,393 a month
The state takes
£6,280
17.9 percent of the whole lot
On your next 100
£72
You keep this much of the next £100 you earn
Your pay, cut up
- Yours to spend£28,720
- Income tax£4,486
UK income tax bands 2025/26, personal allowance 12,570
- National Insurance (employee)£1,794
Class 1: 8% between 12,570 and 50,270, then 2%
Figures use the 2025/26 rules published by HMRC.
Five things, and then you know it
- 1Your pay is sliced, not taxed all at once.
- 2The first slice is usually free.
- 3Only money above a line pays the higher rate.
- 4Contributions come off separately, with their own lines.
- 5Anything you put into a pension is taken from the top slice first.
Every word, in plain English
Gross pay
The big number before anything comes off. Almost nobody keeps this.
Net or take home
What actually lands in your account.
Allowance, threshold, standard deduction
The first slice of your pay that is taxed at nothing.
Band or bracket
A slice of your pay with its own rate. Only the money inside it pays that rate.
Marginal rate
The rate on the next pound or dollar you earn. Always the scariest number.
Effective rate
Tax paid divided by everything you earned. Always lower, and the honest one.
Deduction
Something taken off your income before tax is worked out.
Credit
Something taken off the tax bill itself. Worth more than a deduction of the same size.
Relief
The catch all word for either of those.
Withholding, PAYE, pay as you go
Tax taken before you ever see the money.
Contributions
National Insurance, FICA or the Medicare levy. Not income tax, and they pay for pensions and health.
Tax code
United Kingdom only. The shorthand your employer uses to know how much free slice to give you. Wrong codes cost people the most.
Now do something with it
You know where the money goes. The next step is keeping more of it, legally, with the dates that apply to you.