Gross pay is what you're paid before deductions
Gross pay is the full amount your employer pays you before anything is taken off. That includes Income Tax, National Insurance, and anything else deducted from your pay, such as a pension contribution or student loan repayment. When a job advert or contract states a salary, it's almost always the gross figure.
Net pay is what actually lands in your bank account
Net pay, also called take-home pay, is your gross pay minus all of those deductions. It's the amount you actually receive, and the figure that matters for day-to-day budgeting.
What gets deducted
The most common deductions from gross pay are:
- Income Tax: most UK employees have a tax-free Personal Allowance of £12,570.00 for the 2026/27 tax year before Income Tax applies, though this can be lower for some higher earners. Collected through PAYE.
- National Insurance: a separate deduction that funds certain state benefits, calculated on its own thresholds rather than the Personal Allowance. See National Insurance explained.
- Pension contributions, if you're enrolled in a workplace pension.
- Student loan or Postgraduate Loan repayments, if you're above the relevant repayment threshold.
Why two people on the same gross salary can take home different amounts
Two employees earning exactly the same gross salary can end up with different net pay because their individual circumstances differ. One might pay into a pension and the other might not, one might be repaying a student loan and the other might not, or they might work in different parts of the UK, since Scotland uses its own Income Tax rates and bands. None of this means either payslip is wrong. It reflects real differences in each person's situation.
Working out your own net pay
The exact amount depends on your gross salary, where you live and work, and any pension or loan deductions that apply to you. The Salary Calculator estimates your net pay using WageOra's shared UK tax engine. See How WageOra Works for exactly how it calculates each deduction.