Knowing your net salary from gross — or vice versa — is one of the most common questions during salary negotiations or job offers. Going from gross to net involves employee contributions and then income tax according to the progressive tax scale.
In the UK, take-home pay is calculated by deducting National Insurance contributions (12% on earnings between £12,570 and £50,270, 2% above) and income tax (20% basic rate, 40% higher rate, 45% additional rate). The personal allowance is £12,570 for 2025/26. In the US, deductions include Federal income tax (10–37%), Social Security (6.2%), Medicare (1.45%) and state income tax.
📐 Formula
Net ≈ Gross - Employee NI - Income Tax | Effective tax rate = Total deductions / Gross × 100
📊 Reference table
| Annual gross salary (UK) | Income Tax | National Insurance | Net take-home |
|---|---|---|---|
| £20,000 | £1,486 | £888 | £17,626 |
| £30,000 | £3,486 | £2,088 | £24,426 |
| £40,000 | £5,486 | £3,288 | £31,226 |
| £60,000 | £11,432 | £3,844 | £44,724 |
| £80,000 | £19,432 | £4,224 | £56,344 |
💡 Practical examples
Example 1: £35,000 gross salary, single, no deductions
Income Tax: £4,486. National Insurance: £2,688. Net take-home: £27,826/year = £2,319/month. Effective tax rate: ~20.5%.
Example 2: salary negotiation from £30,000 to £35,000
Gross increase: £5,000/year. Net increase after tax and NI: ~£3,400/year = £283/month extra take-home.
Example 3: employer cost vs employee net
For a £35,000 gross employee: employer NI (13.8% above £9,100) ≈ £3,573. Total employer cost ≈ £38,573. Employee takes home £27,826. Net/employer cost ratio ≈ 72%.