What is net pay?
Net pay, or take-home pay, is the amount an employee actually receives after income tax, National Insurance, pension contributions and any other deductions have been taken from gross pay.
What net pay means
Net pay is the bottom line of a payslip and the money that lands in your bank account. It starts from gross pay and takes off, in turn:
- income tax under PAYE, based on your tax code
- employee National Insurance, 8% on earnings between £12,570 and £50,270 a year and 2% above
- workplace pension contributions
- student or postgraduate loan repayments
- other deductions such as a season ticket loan, a court order or union fees
Example
An employee earns £52,000 a year, has a Plan 2 student loan and pays 5% into a net pay pension scheme. In round monthly figures for 2026/27:
| Line | Monthly |
|---|---|
| Gross pay | £4,333.33 |
| Pension (5%, deducted before tax) | (£216.67) |
| Income tax | (£613.83) |
| National Insurance | (£254.22) |
| Student loan Plan 2 (9% above £2,448.75) | (£169.61) |
| Net pay | £3,079.00 |
Because the pension is taken before tax, taxable pay is £4,116.66. Tax is 20% of that less the £1,047.50 monthly allowance. National Insurance and the student loan are worked out on the full gross pay.
Why it matters
For employees, net pay is the number to budget with. When comparing job offers, a higher gross salary can mean less take-home than expected if it crosses a threshold, such as the £100,000 point where the personal allowance starts to be withdrawn.
For employers, net pay is what you transfer on payday. The deductions are held and paid to HMRC by the 22nd of the next month, and pension contributions go to the scheme. Mixing those funds with business cash is a common reason small employers fall behind with PAYE.
If your net pay looks wrong
Check your tax code first. An emergency code, a code reduced for a benefit or an old underpayment are the usual causes. Our tax codes guide explains what to look for.
Self-employed people do not have net pay in the same sense. Their equivalent is profit after the income tax and National Insurance due on it, which they need to set aside themselves for the 31 January and 31 July payment dates, because nothing is deducted at source.
Payslips must show the deductions that take gross pay down to net pay.
Common questions
Take your gross pay and subtract income tax, National Insurance, pension contributions and student loan repayments. A take-home pay calculator does the sums for any salary, using the current year's thresholds and your student loan plan.
Yes. Both mean the amount you actually receive after all deductions. Payslips may label it net pay, take-home or amount paid. Whatever it is called, it is the figure that actually reaches your bank account on payday after every deduction has been made, and it is the right number to plan household spending around.