PAYE & NI Calculator UK 2026/27
Calculate Income Tax and National Insurance deductions
Standard tax code for 2026/27 is 1257L
What is the difference between PAYE and National Insurance?
PAYE (Pay As You Earn) is how your employer collects Income Tax from your wages. National Insurance is a separate contribution that funds state benefits. Both are deducted from your salary before you receive it.
What are the NI rates for 2026/27?
Employee NI is 8% on earnings between £12,570 and £50,270, then 2% above that. Employer NI is 15% on all earnings above £5,000.
What does my tax code mean?
Your tax code tells your employer how much tax-free income you're entitled to. 1257L means you have a Personal Allowance of £12,570. Letters indicate your situation (L = standard, M = Marriage Allowance received).
Why is Employer NI higher than Employee NI?
From April 2024, Employer NI increased to 15% while Employee NI is 8%. Employer NI is an additional cost to hiring someone and doesn't come out of your salary - it's paid on top.
Do I pay NI on my full salary?
No, you only pay Employee NI on earnings above £12,570 (the Primary Threshold). Earnings below this are NI-free. You also pay a lower rate (2%) on earnings above £50,270.