How to Work Out Take Home Pay from the UK Minimum Wage in 2026/27

Understanding the Headline Rate

When you see the National Living Wage set at £12.71 per hour from April 2026, it is important to remember that this is the gross rate — the amount your employer must pay before any deductions. To work out take home pay, you need to subtract Income Tax and National Insurance, and possibly other deductions like pension contributions or student loan repayments.

How Deductions Work

Your employer uses the PAYE system to deduct tax and National Insurance directly from your wages. For the 2026/27 tax year, the standard personal allowance is £12,570 — you pay no tax on this portion of your earnings. Above that, you pay 20% Income Tax on earnings up to £50,270. National Insurance is charged at 8% on earnings between £12,570 and £50,270, then 2% above that.

These deductions are calculated on your gross pay, not on top of each other. So if you earn £26,437 (40-hour week on NLW), your taxable income is £13,867. Income Tax is 20% of that (£2,773), and National Insurance is 8% of the same band (£1,109). Your take-home pay is £26,437 minus £2,773 minus £1,109 = £22,555 per year, or £1,880 per month.

Take-Home Pay Examples

The table below shows typical take-home pay for different age bands, assuming a 40-hour week and standard deductions (no pension or student loan).

Age Band	Hourly Rate	Gross Annual	Net Monthly	Net Annual
21+ (NLW)	£12.71	£26,437	£1,880	£22,555
18–20	£10.85	£22,568	£1,647	£19,768
Under 18 / Apprentice	£8.00	£16,640	£1,292	£15,500

If you work a 37.5-hour week, your gross annual salary is £24,785 and take-home pay is about £1,780 per month in England, Wales and Northern Ireland. In Scotland, the take-home is slightly higher at £1,784 per month due to different tax bands.

Why Your Take-Home May Differ

Your actual take-home pay can vary for several reasons:

• Tax code: If you have a different tax code (e.g., for benefits in kind or previous underpayments), your deductions will change.
• Pension contributions: If you are enrolled in a workplace pension, your take-home pay will be lower. A typical 5% contribution reduces net pay by around £700–£800 per year.
• Student loan: If you have a Plan 2 or Plan 5 loan, repayments start at 9% of earnings above £2,274 per month (for Plan 2) or £1,834 per month (for Plan 5).
• Scottish taxpayers: As noted, Scotland’s starter rate of 19% means slightly lower tax for low earners.

To get a precise figure for your situation, use a take-home pay calculator or check your payslip. Our pay guides explain how to read your payslip and what each deduction means. You can also explore pay data for typical earnings in different sectors.

Using Our Pay Guides

Understanding the difference between gross and net pay is essential for budgeting and job comparisons. The headline minimum wage rate is a useful benchmark, but your actual spending power depends on your take-home pay. For more detailed breakdowns, visit our UK Minimum Wage homepage or browse topics on tax, National Insurance, and employment rights.

Frequently Asked Questions

Is the minimum wage paid before or after tax?

The minimum wage is a gross (before tax) rate. Your employer must pay you at least the statutory hourly rate, but Income Tax and National Insurance are deducted from your pay. Your take-home pay will be lower than the headline rate.

How do I work out take home pay from my hourly rate?

To work out take home pay, start with your gross annual salary (hourly rate × hours per week × 52 weeks). Then subtract Income Tax (20% on earnings above £12,570) and National Insurance (8% on earnings between £12,570 and £50,270). Use a take-home pay calculator for accuracy, as your tax code and other deductions can affect the final amount.

Why does take-home pay differ between England and Scotland?

Scotland has different Income Tax bands. For a minimum wage worker on £24,785 gross, Scotland’s starter rate of 19% on the first slice of taxable income results in slightly lower tax than the 20% rate in the rest of the UK. This means a Scottish worker takes home about £40 more per year.