PAYE & NI Calculator 2026/27
Work out the income tax and National Insurance on the salary you pay yourself out of your limited company — including the employer's NI your company pays on top, which is the half most calculators leave out.
Calculate PAYE & National Insurance
The salary your company pays you, before any deductions.
Annual salary: £12,570
Free pay £12,570
Scottish rates apply to salary; NI is never devolved.
Annual thresholds: £12,570 / £50,270 / £5,000.
No repayment deducted.
Percentage of gross salary. Leave at 0 for none.
Deducted before income tax. NI is still charged on the full salary.
Your payslip, annualised
Income tax, band by band
National Insurance, band by band
What the company pays
Annual, monthly and weekly
| Item | Per year | Per month | Per week |
|---|
Monthly and weekly figures are each rounded to the penny in their own column, so a column adds up exactly but twelve months will not always equal the annual figure to the last penny. Real payroll rounds period by period too.
Click any row to load that salary into the calculator. Figures use the standard tax code for the year and country selected above, with no pension and no student loan, on the directors' annual earnings period.
| Gross salary | Income tax | Employee NI | Net pay | Employer's NI | Company cost |
|---|
The two figures most one-person companies choose between are £5,000, the secondary threshold, which is the highest salary that attracts no employer's National Insurance at all, and £12,570, which is both the personal allowance and the primary threshold, so it carries no income tax and no employee National Insurance. At £12,570 the company pays 15% employer's NI on the £7,570 above £5,000, which is £1,135.50, because a company whose only employee is a single director cannot claim the £10,500 Employment Allowance. Set both figures in the calculator and compare the total company cost against the corporation tax the salary saves.
A director has an annual earnings period under regulation 8 of the Social Security (Contributions) Regulations 2001, so National Insurance is worked out on cumulative earnings for the whole tax year against the annual thresholds of £12,570, £50,270 and £5,000, whatever the pay frequency. HMRC's manual NIM12021 puts it bluntly: the intervals between payments are irrelevant. An ordinary employee is assessed period by period, and because 12 times the monthly threshold of £1,048 is £12,576 rather than £12,570, the two methods give slightly different answers on the same annual pay. The calculator lets you switch between them.
Yes. Employer's Class 1 National Insurance is 15% of all pay above the secondary threshold of £5,000 a year, and it is a cost of the company, not a deduction from your payslip. The £10,500 Employment Allowance would normally cover it, but it is not available to a company whose only employee paid above the secondary threshold is a single director, so a genuine one-person company really does pay that employer's NI. Take on a second employee paid above £5,000 and the position changes.
Type it in. The calculator handles allowance codes with an L, M, N or T suffix by reading the allowance as the code number times ten, so 1257L gives £12,570 of tax-free pay and 1383M gives £13,830. It handles 0T as no allowance with the normal bands, K codes as extra taxable pay of the code number times ten with the 50% overriding limit applied, and the flat-rate codes BR, D0 and D1, plus NT for no tax at all. Scottish codes with an S prefix and Welsh codes with a C prefix work too, including SBR, SD0, SD1, SD2 and SD3. A W1, M1 or X marker makes no difference to an annual figure and is ignored.
Under a net pay arrangement the contribution comes out of your pay before income tax, so you get full relief immediately, but National Insurance is still charged on the full salary. Under relief at source the contribution comes out of taxed pay and the provider adds 20%, so £80 of your money becomes £100 in the pension; any higher or additional rate relief has to be claimed back through Self Assessment. Salary sacrifice is the only one that touches National Insurance: you give up salary, so income tax, employee NI and the company's 15% employer NI are all charged on the reduced figure. For 2026/27 the NIC exemption on sacrifice is uncapped; a £2,000 cap starts on 6 April 2029.
On a 37.5 hour week £12,570 works out at about £6.45 an hour, well under the £12.71 National Living Wage that applies from 1 April 2026. It is normally not a problem, because a sole director with no written employment contract is generally an office holder rather than a worker, and the minimum wage rules apply to workers. If you do have a contract of employment with your own company, or you have other employees, the National Living Wage is a hard floor, and a salary sacrifice can never take pay below it.
How the arithmetic works
It is common for a contractor to pay themselves a very low salary out of the company's turnover to keep income tax and National Insurance to a minimum, then take the rest of their income as dividends. This calculator does the first half of that sum properly: the PAYE and the NI on the salary, on both sides of the payslip.
The formulas
- Personal allowance = max(0, code allowance − max(0, (adjusted net income − £100,000) ÷ 2)), capped at the taxable pay
- Taxable pay = salary − net-pay pension contribution − salary sacrifice
- Income tax = Σ (slice of taxable income falling in each band × that band's rate)
- Employee NI = 8% × (min(pay, £50,270) − £12,570) + 2% × (pay − £50,270)
- Employer's NI = 15% × (pay − £5,000)
- Student loan = rate × (pay − plan threshold), rounded down to whole pounds
- Net pay = salary − pension − income tax − employee NI − student loan
- Total company cost = salary after sacrifice + employer's NI + employer pension contribution
The 2026/27 bands
In England, Wales and Northern Ireland the personal allowance is £12,570, then 20% on the first £37,700 of taxable income, 40% from £37,701 to £125,140 and 45% above that. In gross-salary terms the 40% band starts at £50,270. All of these are frozen until 5 April 2031. In Scotland the salary bands run 19% to £16,537, 20% to £29,526, 21% to £43,662, 42% to £75,000, 45% to £125,140 and 48% above — the starter and basic thresholds each rose 7.4% in April 2026. National Insurance is not devolved, so a Scottish director's marginal rate between £43,663 and £50,270 is 42% plus 8% = 50%.
The traps
The £100,000 cliff. Between £100,000 and £125,140 the personal allowance is withdrawn at £1 for every £2 of income, so the effective marginal rate on salary is 60% plus 2% employee NI = 62%. It is the highest marginal rate in the system, higher than the 47% above £125,140. A pension contribution is the usual way out, because it reduces adjusted net income and hands the allowance back.
Employer's NI has almost no floor. The secondary threshold is only £5,000, and it is frozen. A £12,570 salary costs the company £1,135.50 in employer's NI on top; a £50,270 salary costs £6,790.50. Because the Employment Allowance of £10,500 is not available where the sole employee is a single director, a one-person company cannot wipe that out.
Directors are on an annual earnings period. Switch the National Insurance basis in the calculator and the answer moves by a few pence, because twelve monthly thresholds of £1,048 come to £12,576 rather than the published annual £12,570, and twelve secondary thresholds of £417 come to £5,004 rather than £5,000. The annual method is the correct one for a director however the salary is actually paid, and it also means a director who takes their whole salary in month 12 still gets the full annual thresholds.
PAYE is not the same as your liability. This page works out the annual position: the allowance from your tax code, tapered above £100,000, with pension relief given in full. Real payroll deducts tax period by period from whatever code HMRC has issued at the time, so a single payslip can be out even when the year is right. If a code is wrong, HMRC reissues it or the difference is settled through Self Assessment.
K codes have a 50% brake. A K code adds to your taxable pay instead of giving you an allowance, but PAYE can never take more than half of a payment in tax. Where that bites, the calculator shows the capped amount and the uncollected balance, which HMRC will chase another way.
What this calculator does not do
It looks at one salary from one employment, on category A National Insurance. It does not handle dividends, benefits in kind, a second job, the reduced married woman's rate, the under-21, apprentice and veteran employer NI categories, or a director appointed part way through the year (whose earnings period is pro-rated under regulation 8(2)). For the dividend side of the sum, and for the salary-versus-dividend split, use the calculators below.
This calculator provides arithmetic calculations only and is not tax advice. Check the figures against GOV.UK National Insurance rates and categories, GOV.UK Income Tax rates and allowances and GOV.UK Tax codes, or with a qualified accountant.