Gross pay vs net pay: what the difference is
Published 2026-08-29, checked against current rates 2026-08-28.
Gross pay is the figure in the job advert and on your contract, the amount before anything is taken off. Net pay, also called take-home pay, is what actually reaches your bank account after deductions. Net is always the smaller number, and the phrase “net of tax” means the same thing: after tax has been removed. On the 2026/27 rates (checked 2026-08-28), someone on a gross salary of £35,000 in England pays £4,486 in income tax and £1,794 in National Insurance, leaving a net salary of £28,720 a year, or £2,393 a month. That is 82% of the headline figure. The gap between the two numbers is not a fixed percentage: it grows as you earn more.
Enter your gross salary and the calculator shows the net figure per year, month, week and hour, with every deduction itemised.
Work out your net payWhat is gross pay?
Gross pay is your total earnings before any deduction: basic salary plus overtime, bonuses, commission, shift premiums and holiday pay. It is the number employers advertise, the number used to compare offers, and the number lenders ask about. It is also the number your tax is calculated from, which is exactly why it is never the number you receive. If you are paid hourly rather than salaried, your gross pay is your hourly rate multiplied by the hours worked, and our hourly wage calculator converts between the two.
What is net pay?
Net pay is gross pay minus every deduction your employer is required or instructed to make. For most employees that means income tax and National Insurance, and often a student loan repayment and a pension contribution as well. Net pay is what the payslip calls “net pay” or “take-home pay”, and it is the figure that matches your bank credit. Yes, net pay is after tax: the two phrases describe the same amount.
What comes out between gross and net?
Order matters here, because each deduction is worked out on a different base. Using the £35,000 salary above:
- Personal allowance comes off first. The first £12,570 is taxed at 0%, leaving £22,430 of taxable income.
- Income tax, band by band. £4,486 here, all at the basic rate of 20%.
- National Insurance, on a different threshold. 8% on earnings between £12,570 and £50,270, then 2% above that. It ignores your tax code entirely, which is why NI keeps being charged even when your income tax is wrong.
- Student loan, if you have one. A flat 9% of everything above your plan's threshold, or 6% for a postgraduate loan. See the plan comparison.
- Pension. Depending on the scheme, this comes off before tax, before tax and NI, or after both. The salary sacrifice guide shows why the difference is worth real money.
Why does the gap widen as you earn more?
Because the UK system is progressive: higher slices of income are taxed at higher rates. The percentage you keep therefore falls steadily as gross pay rises, and falls sharply above £100,000 where the personal allowance is withdrawn.
| Gross salary | Net pay (year) | Net pay (month) | You keep |
|---|---|---|---|
| £20,000 | £17,920 | £1,493 | 90% |
| £30,000 | £25,120 | £2,093 | 84% |
| £40,000 | £32,320 | £2,693 | 81% |
| £50,000 | £39,520 | £3,293 | 79% |
| £70,000 | £51,157 | £4,263 | 73% |
| £100,000 | £68,557 | £5,713 | 69% |
Doubling gross pay from £20,000 to £40,000 does not double net pay: it takes it from £17,920 to £32,320. This is also why a pay rise feels smaller than it looks, something the pay rise calculator handles properly.
How do I work out gross pay from net pay?
Going backwards is harder than going forwards, because the answer depends on which bands the gross figure lands in, and you do not know that until you have the answer. There is no simple multiplier. The reliable method is to search for the gross salary that produces your target net, which is exactly what the reverse tax calculator does. It is the tool to use when you know what you need to take home each month and want to know what salary to negotiate for.
Is the advertised salary gross or net?
In the UK, advertised salaries are always gross. A job listed at £30,000 means £30,000 before tax, and the successful applicant will bank roughly £2,093 a month. The same applies to hourly rates in adverts and to the National Minimum Wage, which is set as a gross figure. Whenever you compare two offers, compare them net, particularly if one includes a pension contribution or is based in Scotland, where the income tax bands are different.
Sources
- gov.uk: income tax rates and personal allowances
- HMRC: rates and thresholds for employers 2026 to 2027
Every figure on this page is computed from those tables at build time, checked 2026-08-28. If a number here ever disagrees with gov.uk, gov.uk is right and this is a bug worth telling us about. See our corrections policy.
Related guides
How to calculate take-home pay by hand
Five steps, in the order payroll does them. Follow it once and every payslip you ever get will make sense.
How to read your payslip, line by line
Gross, taxable pay, NI letter, YTD columns. What each one means and the four checks that catch a payroll error early.
All 10 guides are listed on the guides index, and every calculator on the home page.