A £20,000 salary is about £17,920 a year after tax, which is roughly £1,493 a month or £345 a week.
That is for the 2026/27 tax year on the standard 1257L tax code, with no pension contributions and no student loan, in England, Wales or Northern Ireland. Scotland sets its own income tax bands, as explained below. The sections below show all the calculations so you can see where your money goes.
£20,000 after tax at a glance
| Yearly | Monthly | Weekly | |
|---|---|---|---|
| Gross pay | £20,000 | £1,667 | £385 |
| Tax-free allowance | £12,570 | £1,048 | £242 |
| Income tax | £1,486 | £124 | £29 |
| National Insurance | £594 | £50 | £11 |
| Take-home pay | £17,920 | £1,493 | £345 |
You keep about 90p of every pound you earn at this salary. More than 62% of the salary is covered by the tax-free personal allowance.
The working, step by step
Step 1: take off the personal allowance. The first £12,570 you earn carries no income tax. That leaves £7,430 of taxable income.
Step 2: apply income tax. The basic rate band runs from £12,570 up to £50,270, so all £7,430 sits inside it and is taxed at 20%.
£7,430 x 20% = £1,486
Step 3: apply National Insurance. Employees pay 8% on earnings between £12,570 and £50,270. That applies to the same £7,430.
£7,430 x 8% = £594
Step 4: what is left is yours.
£20,000 minus £1,486 minus £594 = £17,920
Your headline tax rate is 20%, but your effective income tax rate is 7.4%, because the first £12,570 is free of tax. The personal allowance accounts for the large difference between the headline rate and the effective rate. Add National Insurance and the total deduction is 10.4% of gross pay.
What £20,000 works out at per hour
On a standard 37.5 hour week across 52 weeks, that is 1,950 hours a year.
- Gross: £10.26 an hour
- After tax and National Insurance: £9.19 an hour
If you work a 40 hour week the gross figure drops to £9.62 an hour.
For comparison, the UK National Living Wage for workers aged 21 and over is £12.71 an hour in 2026/27. On a 37.5 hour week, full-time minimum wage earnings come to £24,785 a year. Therefore, a £20,000 salary for 37.5 or 40 hours is below the legal minimum wage for adults aged 21 and over. A £20,000 salary is typical for part-time roles (for example, about 30 hours a week at £12.71), apprentices, or workers aged under 21 who have lower statutory wage minimums. You can convert any combination of hours and pay with the hourly pay calculator.
£20,000 after tax with a student loan
Student loan repayments come off your pay through PAYE after tax and National Insurance. At £20,000 you make no student loan repayments on any plan, because the salary sits below all repayment thresholds:
| Plan | Threshold | Yearly repayment | Monthly | Take-home after loan |
|---|---|---|---|---|
| Plan 1 | £26,900 | £0 | £0 | £17,920 |
| Plan 2 | £29,385 | £0 | £0 | £17,920 |
| Plan 4 (Scotland) | £33,795 | £0 | £0 | £17,920 |
| Plan 5 | £25,000 | £0 | £0 | £17,920 |
Each plan takes 9% of income above its threshold. Plan 5 has the lowest threshold at £25,000, so you would need to earn £5,000 more before loan deductions start. You can check repayment schedules for any earnings on the student loan repayment calculator.
What changes the number
A workplace pension. If you contribute 5% into a pension scheme, £1,000 a year goes into your pension pot. Your take-home pay falls to around £17,120 under relief at source, rather than by the full £1,000, because the contribution reduces the pay you are taxed on. Under salary sacrifice it also reduces your National Insurance, leaving roughly £17,200. The salary sacrifice guide explains how both methods operate.
Your tax code. 1257L is the standard tax code. A different code changes your tax-free allowance. Common reasons for a different code include having a second job, which often receives a BR code with zero personal allowance, or claiming the Marriage Allowance. The tax code checker explains what each tax code means.
Living in Scotland. Scottish income tax has a 19% starter rate on the first £2,306 of taxable income. Because of this starter rate, someone earning £20,000 in Scotland pays about £1,463 in income tax rather than £1,486, leaving about £17,943 after tax, roughly £23 a year more than in England.
Bonuses and overtime. Additional earnings are taxed within the basic rate band at 20% income tax and 8% National Insurance. If your payslip deduction looks unexpectedly high in a particular month, see why you paid more tax this month.
Is £20,000 a good salary in the UK?
A £20,000 salary sits well below the UK full-time median wage. However, it is a very common income for part-time workers, retail staff, customer service assistants, and younger workers starting out in employment.
What matters most in practice is living costs and working hours. A take-home pay of £1,493 a month can support single living in lower-cost areas or provide a second household income, but it leaves very little room for housing costs in London or the south east. If you receive a pay offer, compare it with how much is £22,000 after tax or how much is £25,000 after tax.
Headroom before the higher tax rate
At £20,000 you have £30,270 of headroom before reaching the higher rate threshold at £50,270. Every extra pound of pay up to that threshold is taxed at 20% income tax plus 8% National Insurance, so you keep 72p of every pound of a pay rise. For example, a pay rise from £20,000 to £22,000 adds £1,440 a year to your pocket, or £120 a month. You can check the value of any increase using the pay rise calculator or see the £20,000 salary ladder page.
Work out your own figure
The figures above represent a standard employee with no student loan or pension deductions. If your situation includes pension payments, student loans, or Scottish tax rates, your net pay will vary.
You can use the take-home pay calculator to enter your exact pay details and see an itemised deduction breakdown.
Common questions
How much is £20,000 after tax and National Insurance per month? About £1,493 a month, based on £17,920 a year divided by twelve months.
How much is £20k a year per hour? About £10.26 an hour gross on a 37.5 hour week, or £9.19 an hour after tax and National Insurance.
Is £20,000 above the UK minimum wage? Not for a standard full-time week. At 37.5 hours a week, the National Living Wage of £12.71 an hour equals £24,785 a year. A £20,000 salary is below minimum wage for adults aged 21 and over unless you work 30 hours a week or fewer.
Do I repay a student loan on a £20,000 salary? No. All UK student loan repayment thresholds are at or above £25,000, so zero student loan repayments are deducted.
Sources
- Income Tax rates and Personal Allowances on gov.uk
- National Insurance rates and categories on gov.uk
Information, not financial advice. Figures use 2026/27 rates for England, Wales and Northern Ireland and are estimates to help you understand the rules. Check your own circumstances against gov.uk or speak to a qualified adviser before acting on them.