Tax rate · estimate tool
Tax percentage calculator – how much of your pay you keep
Work out what a given tax rate means in pounds per month and year, compare two tax rates against each other, or find your effective tax rate from the tax you actually paid. This is an estimate tool – for your official tax position use HMRC.
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Why you can't work out a tax rate from your pay alone
Many people expect the tax rate to fall out of a single number: multiply your pay by a table and get a percentage. In the UK it doesn't work that way. Your effective tax rate depends on at least:
- Your total annual income, not a single month. A second job, a bonus or overtime changes the picture.
- The Personal Allowance. The tax-free portion of income means the effective rate is always lower than the band rate.
- The income bands. Income above each threshold is taxed at 20% (basic), 40% (higher) or 45% (additional), so your average rate sits between them.
- Your tax code. It reflects allowances, benefits in kind and adjustments – and can change during the year.
- Deductions and reliefs. Pension contributions, Gift Aid and certain expenses reduce the tax you pay.
That's why this calculator doesn't guess your tax rate. It works out what your own rate means in pounds – and you'll find that number on your payslip or in your HMRC account.
What a percentage-point change costs
It's worth looking at a change in the tax rate in pounds, because a percentage point sounds small. A one-percentage-point rise takes £30 a month from a £3,000 monthly income, i.e. £360 a year.
| Income / mo | 1 pp / mo | 1 pp / year | 3 pp / year |
|---|---|---|---|
| £2,000 | £20.00 | £240.00 | £720.00 |
| £3,000 | £30.00 | £360.00 | £1,080.00 |
| £4,000 | £40.00 | £480.00 | £1,440.00 |
| £5,500 | £55.00 | £660.00 | £1,980.00 |
Notice the difference in wording: a rise in the tax rate from 22% to 24% is two percentage points, but the amount of tax you pay goes up 9.09%. Headlines often use the second figure because it sounds bigger. The calculator shows both.
When it's worth checking your tax code
- Your pay changes – a rise, a change in hours or a new job.
- You start or stop a second job, which changes your total annual income.
- You move from work to a pension or a benefit: the income type changes and so does the tax.
- Your deductions change – a new pension arrangement, Gift Aid or expenses.
- You get a benefit in kind such as a company car, which is reflected in your tax code.
A tax code that's too generous can lead to an underpayment; one that's too tight leads to an overpayment – either way it's just a timing question, not a saving. The aim is to be as close to right as possible.
This site is not an HMRC service. We can't give binding information about your tax rate or handle your tax code. Use HMRC's own tools and your Personal Tax Account when you need an official estimate or want to change your details.
A refund and an underpayment are just timing
A tax refund feels like a bonus, but it's your own money that HMRC has been holding interest-free. An underpayment means your tax code was too generous and part of the tax wasn't collected at the right time.
Neither changes the total amount of tax due – only when the money moves. If you get a large refund every year, it can be worth checking your tax code: then the same money is available to you month by month. If you keep getting underpayments, the code may need adjusting.
| Deducted rate | Deducted / mo | Difference from right | Year end |
|---|---|---|---|
| 20% | £600 | −£90/mo | Underpayment about £1,080 |
| 23% | £690 | £0 | About right |
| 26% | £780 | +£90/mo | Refund about £1,080 |
The calculator helps here on the comparison tab: enter your monthly income and your current and proposed rate to see the difference in pounds per month and year.
Effective tax rate
The third tab works out what your tax rate actually was: tax paid / gross income × 100.
This is handy when your tax summary arrives, because it shows the amounts but not always the overall percentage
directly. If your effective rate differs clearly from the rate being deducted, it may have been worth adjusting your
tax code during the year.
The basics of tax-rate calculation
The calculator tells you what your tax rate means in pounds. It does not estimate what your tax rate should be.
Formulas and examples
Take-home
income × (1 − tax rate / 100)Example
£3,200 at 22.5%: 3,200 × 0.775 = £2,480.
Note
National Insurance and any pension come off this too.
Effect of a rate change
income × (old % − new %) / 100Example
£3,000 and a change 22.5% → 24%: −£45/mo, i.e. −£540 a year.
Note
One percentage point is £30 a month on a £3,000 income.
Effective tax rate
tax paid / gross income × 100Example
£9,240 / £42,000: 22%.
Note
Useful for checking your tax summary.
Relative change in tax
(new % − old %) / old % × 100Example
22% → 24% is 2 percentage points but +9.09% more tax.
Note
The news often uses the latter figure.
Concepts and classification
| Personal Allowance | The tax-free portion of income before Income Tax applies. |
|---|---|
| Basic / higher / additional rate | The 20% / 40% / 45% Income Tax bands. |
| Earned income | Salary, pension and benefits – taxed progressively. |
| Tax refund | Over-deducted tax, repaid afterwards. |
| Underpayment | Under-deducted tax, paid afterwards. |
Limitations of the calculator
- The calculator doesn't work out your tax rate – you enter it yourself.
- Deductions, the Personal Allowance and reliefs are not modelled separately.
- Banding and the progressive structure are ignored; the calculation uses a flat rate.
- The result is not a tax decision. An official estimate comes from HMRC.
How up to date the information is
When it was checked
Content and the percentages used were checked on 12 August 2026.
Disclaimer
The calculator gives a mathematical result from the numbers you enter. It is not an official decision, an offer or professional advice. See the terms of use.
Topics
This calculator belongs to the following topic areas. On the topic page you'll find all the calculators and guides on the same theme in one place.
Other tax and income calculators
Frequently asked questions about the tax rate
How do I work out what's left of my pay after tax?
Multiply the income by (1 − tax rate/100). For example £3,200 at 22.5%: 3,200 × 0.775 = £2,480. From real pay, National Insurance and any pension also come off, which you can work out with the salary calculator.
Does this calculator tell me my own tax rate?
No. Your effective rate depends on your income, the Personal Allowance, the tax bands and your tax code. The calculator tells you what your own rate means in pounds. For an official estimate, use HMRC's own tools.
What is the difference between a percentage point and a per cent for a tax rate?
A rise in the tax rate from 22% to 24% is two percentage points. The amount of tax you pay, however, goes up 9.09%. Both numbers describe the same change from different angles.
Why did my effective tax rate rise later in the year?
UK Income Tax is banded. When your income crosses a band threshold, the part above it is taxed at a higher rate (20% basic, 40% higher, 45% additional). If your income rose during the year, more of it falls in a higher band.
Is pension income taxed the same as a salary?
Not quite. Pension income is subject to Income Tax but not to National Insurance in the same way earned income is, and pensioners may have different allowances. So the same amount of pension and salary leaves a different net figure. Use your own tax rate for the pension.