Guide · Updated 2026-10-08
Gross vs Net Pay Explained (UK Examples)
Gross pay is what you earn before deductions, net pay is what lands in your bank. See the difference with UK examples, what is deducted and how to work it out.
Gross pay is your pay before anything is taken off. Net pay, also called take-home pay, is what you actually receive after income tax, National Insurance and other deductions. A job advertised at £30,000 is gross. After tax and National Insurance you receive about £25,120 a year, or £2,093 a month.
Gross versus net at a glance
| Gross pay | Net pay | |
|---|---|---|
| Meaning | Pay before deductions | Pay after deductions |
| Also called | Salary, annual pay, pre-tax pay | Take-home pay, pay after tax |
| Quoted in | Job adverts, contracts | Payslips, bank deposits |
| £30,000 example | £30,000 | £25,120 |
What comes off gross pay
- Income tax on earnings above your personal allowance (£12,570 in 2026/27).
- National Insurance, which builds your State Pension record.
- Workplace pension contributions, usually a percentage of your pay.
- Student loan repayments once you earn above the threshold for your plan.
- Other items such as cycle-to-work schemes, union fees or benefits in kind.
Worked example at £30,000
- Gross: £30,000
- Income tax: (£30,000 - £12,570) x 20% = £3,486
- National Insurance: (£30,000 - £12,570) x 8% = £1,394
- Net: £30,000 - £3,486 - £1,394 = £25,120
The same salary after a 5 percent pension contribution would give a lower take-home figure, but you are saving for retirement and pay less tax on the contribution.
How to move between gross and net
- Gross to net: enter your salary into the Take-Home Pay Calculator.
- Hourly to salary: use the Hourly to Salary Calculator to get a gross yearly figure.
- Salary to hourly: use the Salary to Hourly Calculator.
Which figure should you use?
- Comparing job offers: compare gross salaries first, then check the net for the one you like.
- Budgeting: always use net pay, because that is the money you can spend.
- Mortgages: lenders usually base affordability on gross income.
Frequently asked questions
Is salary gross or net? Salary figures in job adverts and contracts are almost always gross.
Why is net pay different every month? Overtime, bonuses, tax code changes and unpaid leave all change the deductions.
What is the difference between gross and net profit? The same idea applies to a business: gross profit is sales minus cost of sales, and net profit is what remains after all expenses and tax. See the Profit Margin Calculator.
Figures are 2026/27 estimates for England, Wales and Northern Ireland. This guide is general information, not tax advice.