UK rates Bank Rate 3.75% 2-yr fix avg 5.13% 5-yr fix avg 4.98% (Sept 2026) Tax year 2026/27 Personal allowance £12,570 Employee NI 8%

Methodology

Exactly how every calculator works — the formulas, the rounding rules, where the data comes from and where we simplify.

Principles

  • Money in pence. All calculations use whole pence internally, never floating-point pounds, so totals always add up.
  • Rules as data. No tax rate or threshold is written into the code. Each is held in a versioned data file per tax year, with its source and verification date.
  • One engine. Every calculator, salary page and guide example uses the same tested engine, so figures agree across the site.
  • Runs on your device. All calculations happen in your browser.

Take-home pay (PAYE)

  1. Gross pay is converted to an annual figure from the period you enter (hourly × hours × 52, weekly × 52, monthly × 12, etc.), plus bonus and overtime.
  2. Salary sacrifice (pension and other) is deducted before tax and NI. A net pay arrangement pension is deducted before tax only.
  3. Personal Allowance: £12,570, reduced by £1 for every £2 of adjusted net income over £100,000. Blind Person's Allowance is added and a Marriage Allowance transfer deducted where selected. If you enter a tax code, its allowance replaces this (K codes add to taxable pay; BR, D0, D1, D2, NT and 0T are applied as flat or nil allowances).
  4. Income Tax is charged on taxable income, rounded down to the whole pound, across the rest-of-UK or Scottish bands. Relief-at-source pension contributions extend each band limit by the gross contribution. The result is truncated to the penny. K code tax is capped at 50% of pay.
  5. National Insurance is calculated for each pay period separately using that period's thresholds (monthly £1,048/£4,189; weekly £242/£967; four-weekly and fortnightly as multiples of weekly). Period pay is taken in whole pence. Fractions of a penny of 0.5p or less round down, more than 0.5p round up. A bonus is added to a single period.
  6. Student loans are calculated per period: plan rate × (period pay − annual threshold ÷ periods), rounded down to the pound. With several undergraduate plans, the lowest threshold applies. A Postgraduate loan is added on top.
  7. Relief-at-source pensions are deducted from net pay at 80% of the gross contribution.
  8. Marginal rate is the share of an extra £1,200 a year (£100 a month) lost to tax, NI and student loan. Effective rate is total tax, NI and student loan ÷ gross pay.
  9. Employer NI is shown for information: 15% above £5,000 a year (annual approximation).

Simplifications: we show a full, normal tax year. Real payroll applies tax cumulatively and uses HMRC's tax tables, so individual payslips can differ by pennies, and by more in the first months of a job or after a code change. We don't model savings or dividend income, the Employment Allowance, or every NI category letter.

Self-employed tax

Profit = turnover − expenses (or the £1,000 trading allowance). Income Tax on profit is the tax on (employment income + profit) minus the tax on employment income alone, so your job uses the allowance and lower bands first. Class 4 NI is 6% between £12,570 and £50,270 and 2% above. Payments on account are 50% each of Income Tax + Class 4 when the bill exceeds £1,000. Student loans through Self Assessment are excluded from payments on account. We don't model the 80%-collected-at-source exemption, losses or capital allowances.

Mortgages and loans

  • Repayment: standard annuity payment = P × r ÷ (1 − (1 + r)−n), with r = annual rate ÷ 12. Each month's interest = balance × r, rounded half-to-even to the penny. The last payment absorbs the rounding residual so the balance ends at exactly £0.
  • Two-stage rates: the payment is recalculated at the start of each rate period over the remaining term.
  • Overpayments reduce the balance after the scheduled payment. In reduce-payment mode the payment is recalculated after each overpayment. The ERC check compares overpayments in each 12-month period with your allowance × balance at the start of that period.
  • Remortgage true cost = upfront costs (ERC, legal, fees not added to the loan) − cashback + payments over the horizon + balance still owed at the horizon.
  • Affordability = the lower of 4.5× gross income and the largest loan whose payment, at your rate plus the stress margin, fits within your chosen share of take-home pay after commitments.
  • Car finance uses APR as an annual effective rate converted to a monthly rate. PCP payments discount the balloon to present value.

Some lenders calculate interest daily or on a different date, which can change figures by a few pence a month.

Stamp duty (SDLT, LBTT, LTT)

Tax is calculated slice by slice across the bands of the schedule in force on the date used. First-time buyer schedules apply where eligible (England/NI capped at £500,000). Surcharges: England/NI add the higher-rate percentage to every band; Scotland's ADS is a flat percentage of the whole price; Wales uses its higher-rates table. Non-resident surcharge applies in England/NI only. The total is rounded down to the pound. Not covered: mixed-use, linked transactions, multiple dwellings relief and leasehold rent.

Debt and savings

Debts: monthly interest = balance × APR ÷ 12, then each debt's minimum (fixed, or a percentage of the balance plus interest with a floor), with the rest of the budget going to the target debt. We stop at 600 months and say so if a debt never clears. Savings: monthly compounding uses the monthly rate that compounds to the AER. Annual compounding accrues AER ÷ 12 monthly and credits it at year end. Tax, if selected, is deducted from each year's interest.

Statutory maternity, paternity and sick pay

Average weekly earnings (AWE) = weekly pay, or monthly pay × 12 ÷ 52, or yearly pay ÷ 52. SMP: 90% of AWE for 6 weeks, then the lower of £194.32 and 90% of AWE for 33 weeks. SPP: the lower of £194.32 and 90% of AWE for 2 weeks. Percentages of AWE are rounded up to the penny. SMP and SPP need AWE of at least the Lower Earnings Limit (£129.00 a week). SSP: the lower of £123.25 and 80% of AWE, from the first qualifying day, for up to 28 weeks. Part weeks are the weekly rate × days ÷ qualifying days, rounded up to the penny. For 2025/26 we apply that year's three waiting days and earnings test. We don't model enhanced employer schemes, pay rises during leave or linked periods of sickness.

Pension pot projection

Each month we add your contribution (gross % of salary or of qualifying earnings, £6,240–£50,270), your employer's core % plus any match (the lower of your % and the match cap), and personal contributions grossed up by basic-rate relief at source. Growth is the monthly rate that compounds to your annual rate; charges are taken monthly at the rate that compounds to the annual charge. Each step is rounded half-to-even to the penny. Salary rises once a year. At retirement the tax-free lump sum is 25% of the pot, capped at £268,275. Drawdown is a level annual income = remaining × r ÷ (1 − (1 + r)−n), with r = (1 + growth) × (1 − charges) − 1. Today's money divides by (1 + inflation)years to retirement. "Costs you now" is the difference in take-home pay with and without the contribution, from the PAYE engine. Growth is assumed steady; real returns vary.

Budget planner

Targets are take-home pay × each group's share (50/30/20, 60/20/20, 70/10/20 or your own). Rounding uses the largest-remainder method, so the three targets add up to take-home pay to the penny. Planned spending is the sum of your lines in each group; money left to plan = take-home pay − everything planned. Savings rate = planned savings & debt ÷ take-home pay. If you start from a salary, take-home pay comes from the PAYE engine for a standard tax code with no pension or student loan.

Live interest rates

Mortgage rate fields are pre-filled from the Bank of England's published series IUMBV34, IUMBV37 and IUMBV42 (2, 3 and 5-year fixed, 75% LTV) and Bank Rate (IUDBEDR). They're refreshed daily from the Bank of England's database and validated before use. If the refresh fails, we keep the last good values and show their date.

Updates and corrections

On the 1st of every month, an automated check compares around 80 figures in our rules with the official pages they come from: GOV.UK, Revenue Scotland and the Welsh Revenue Authority. The figures include tax bands, the Personal Allowance, National Insurance thresholds and rates, student loan thresholds, statutory pay, the minimum wage, pension allowances and property tax bands. Each figure must appear on the official page next to its label. The "rules checked" date shown on our calculators moves forward only when every figure matches. If anything differs, the date stays put until we've reviewed and updated the rule.

We also review the rules after each UK and Scottish Budget, and when HMRC publishes final rates before each new tax year (6 April). Rules last checked: 18 October 2026. No material corrections have been made since launch.