How take-home pay is worked out
Your gross salary is the number in the job offer. Take-home pay, net pay, is what actually reaches your bank account after the government's share is withheld. Two kinds of deduction do most of the work in both the United States and the United Kingdom: income tax, charged in progressive bands, and earnings-based contributions, Social Security and Medicare (together "FICA") in the US, National Insurance in the UK.
At a glance
- Taxable income is gross pay minus the standard deduction or personal allowance.
- Each band's rate applies only to the income inside that band.
- Social Security, Medicare and National Insurance are charged on gross pay with their own thresholds.
- State tax, pensions and student loans are not included.
This calculator applies the published rules for the tax year you choose in three steps. First it subtracts the tax-free amount everyone gets, the standard deduction in the US or the personal allowance in the UK, to find your taxable income. Then it runs that taxable income through the income-tax bands, charging each band's rate only on the slice of income that falls inside it. Finally it works out the contributions, which use your gross pay (not your taxable income) and have their own thresholds and caps.
Bands, marginal rate and effective rate
Progressive taxation is the source of most confusion about pay. Moving into a higher band does not mean all of your income is taxed at the higher rate, only the part above the threshold is.
taxable income = gross − allowance income tax = Σ (income inside band × band rate) take-home = gross − income tax − contributions
Two rates summarise the result. The marginal rate is the rate on your next unit of income, useful for judging a pay rise, overtime or a bonus. The effective rate is total deductions divided by gross pay, what your salary actually costs you overall. The effective rate is always lower than the marginal rate because your first slices of income are taxed at zero and then at the lower bands.
Worked example: $75,000, single filer, US 2025
Standard deduction $15,750 → taxable income $59,250.
Federal tax by band: 10% on the first $11,925 = $1,192.50; 12% on the next $36,550 = $4,386.00; 22% on the remaining $10,775 = $2,370.50. Total $7,949.00.
Social Security 6.2% × $75,000 = $4,650.00. Medicare 1.45% × $75,000 = $1,087.50.
Take-home: $75,000 − $7,949 − $4,650 − $1,087.50 = $61,313.50 a year, or $5,109.46 a month. Marginal rate 22% (plus 7.65% FICA); effective rate 18.2%.
The United States: standard deduction and FICA
Federal income tax uses seven bands from 10% to 37%, with different thresholds for single filers, married couples filing jointly or separately, and heads of household. Before the bands apply, the standard deduction is subtracted; for 2025 it is $15,750 for a single filer and $31,500 for a joint return following the One Big Beautiful Bill Act, rising to $16,100 and $32,200 for 2026. If you itemise deductions instead, your taxable income will differ.
| US 2025 band (single filer) | Rate |
|---|---|
| $0 to $11,925 | 10% |
| $11,925 to $48,475 | 12% |
| $48,475 to $103,350 | 22% |
| $103,350 to $197,300 | 24% |
| $197,300 to $250,525 | 32% |
| $250,525 to $626,350 | 35% |
| Over $626,350 | 37% |
FICA is simpler but has two quirks. Social Security is 6.2% of wages up to an annual wage base ($176,100 in 2025, $184,500 in 2026); above that, no more is withheld. Medicare is 1.45% with no cap, plus an Additional Medicare Tax of 0.9% on wages above $200,000 for single filers ($250,000 joint). Your employer pays a matching share that never appears on your payslip.
The United Kingdom: personal allowance, bands and National Insurance
Most people receive a personal allowance of £12,570 tax-free. Income above it is taxed at 20% up to £50,270 of total income, 40% up to £125,140 and 45% beyond. The allowance is tapered once income passes £100,000, reduced by £1 for every £2 earned, and disappears completely at £125,140. In that range the effective marginal rate is 60% before National Insurance, which is why the calculator flags a reduced allowance.
Employee Class 1 National Insurance is 8% on earnings between £12,570 and £50,270 a year and 2% above that. Unlike income tax it is worked out per pay period rather than cumulatively, but on a steady salary the annual total is the same.
Worked example: £60,000, UK 2025/26
Personal allowance £12,570 → taxable £47,430.
Income tax: 20% on the first £37,700 = £7,540; 40% on the remaining £9,730 = £3,892. Total £11,432.
National Insurance: 8% on £37,700 (£12,570 to £50,270) = £3,016; 2% on the £9,730 above = £194.60. Total £3,210.60.
Take-home: £60,000 − £11,432 − £3,210.60 = £45,357.40 a year, £3,779.78 a month.
Reading the tables
The income tax by band table shows exactly how much of your income sits in each band and what it costs, the quickest way to see why a raise is worth less than its headline. The pay by period table converts the annual figures to monthly, two-weekly and weekly amounts so you can compare with a payslip. Change the "show take-home per" control to make the headline figure match how you are paid.
What is not included
- US state and local income tax. Rates range from zero (Texas, Florida) to over 10% (California) and cities such as New York add more. Subtract your state's figure separately.
- Pension and retirement contributions. 401(k), IRA and UK workplace-pension contributions reduce taxable income (or come out after tax, depending on the scheme) and are not modelled.
- Student loans, benefits in kind, salary sacrifice, tax credits. Each changes the result and depends on your circumstances.
- Scottish income tax and Welsh rates. The UK ruleset uses the bands for England, Wales and Northern Ireland; Scotland has six bands with different thresholds.
- Payslip timing. Employers use tax codes and cumulative calculations, so an individual month can differ from one-twelfth of the annual figure, especially after a bonus or a mid-year change.
Using the result
For budgeting, use the monthly take-home, it is the number you can actually spend. For comparing two job offers, compare annual take-home rather than gross salary; the difference between offers shrinks after tax. When you are offered a raise, look at the marginal rate: it tells you how much of each extra pound or dollar you will keep. And whenever a figure matters, a mortgage application, a relocation, a tax return, confirm it against the official IRS or HMRC calculators, which are linked under Data sources on this page.