A take-home pay calculator shows the annual position for a standard case, divided by twelve. A payslip shows one period, worked out under PAYE rules that treat income tax, National Insurance and student loans in three different ways. When the two disagree, one of the nine causes below almost always explains it, and most of them are not errors.
The figures here use the 2026/27 rates for England, Wales and Northern Ireland.
1. Your tax code is not 1257L
Every calculator assumes the standard tax code unless you change it. Your code may be different for good reasons: a company car or medical insurance, a previous year’s underpayment being collected, the Marriage Allowance, a second job, or an estimate HMRC has made about untaxed income.
Each 10 points of difference in the code is worth £100 of tax-free allowance, or about £20 a year in tax at the basic rate. A code of 1100L instead of 1257L costs a basic rate taxpayer around £314 a year, or £26 a month. A K code adds to your taxable pay rather than taking from it, so the difference can be much larger. Put your actual code into the tax code checker and then into the take-home pay calculator; the gap usually closes.
2. Income tax is cumulative, so earlier months change this one
PAYE does not tax each month in isolation. Every month, payroll works out the tax due on your total taxable pay since 6 April, using the share of your allowance and bands that has accrued so far, then deducts the tax you have already paid. This month’s tax is the difference.
The effect is that anything unusual earlier in the year, a pay rise, a bonus, unpaid leave, a period with no earnings, changes the tax on an ordinary month later. Someone starting a job in October with no earnings since April has seven months of unused allowance, so their first few payslips show very little tax. The calculator, which assumes a full year of even pay, shows a normal month’s tax instead. The reverse happens if you had a well-paid job earlier in the year and a lower-paid one now. Our guide on why you paid more tax this month walks through the arithmetic.
3. National Insurance is worked out per payslip, not per year
This is the one people rarely expect. Income tax is annual and cumulative. Employee National Insurance is charged on each pay period on its own, against thresholds for that period: 8% on monthly pay between £1,048 and £4,189, and 2% above £4,189. Nothing carries forward.
Take someone paid £2,000 a month who receives a £4,000 bonus in one month, so £6,000 that month and £28,000 for the year.
- A normal month: £2,000 minus £1,048 is £952, taxed at 8%, which is £76.16. Eleven of those come to £837.76.
- The bonus month: 8% of the £3,141 between £1,048 and £4,189 is £251.28, plus 2% of the £1,811 above £4,189, £36.22. Total £287.50.
- National Insurance actually paid: £1,125.26.
An annual calculator on £28,000 charges 8% on £15,430, which is £1,234.40. The payslips show £109 less, because the bonus pushed part of one month into the 2% band even though the annual salary never reaches the upper limit. The effect works in reverse for people paid irregularly with several low months. Company directors are the exception: their National Insurance is assessed annually. The National Insurance calculator shows both bases.
4. You are paid weekly or every four weeks
Weekly pay uses weekly thresholds (£242 to £967 for the 8% band) across 52 or sometimes 53 pay days. Four-weekly pay produces 13 payslips a year, each against four-weekly thresholds of £968 and £3,868. A monthly calculator divided by four will not match a weekly payslip, and a week 53 payslip, which happens when 6 April falls so that a 53rd weekly pay day lands in the year, gets an extra week of tax allowance that HMRC may later recover through a P800. Set the calculator to your real pay frequency before comparing.
5. Your pension is taken a different way from the one the calculator assumes
There are three ways a workplace pension contribution can appear, and they produce three different net pay figures for the same 5%.
- Salary sacrifice. Your gross pay is reduced before tax and National Insurance. Net pay is highest under this method, because both are saved.
- Net pay arrangement. The contribution is deducted from gross pay before income tax but after National Insurance. Common in large employer and public sector schemes.
- Relief at source. A contribution of 4% is taken from pay after tax, and the pension provider claims 1% from HMRC to make up the 5%. Net pay is lowest under this method on the payslip, although the pension pot ends up the same. Higher rate taxpayers must claim the extra relief themselves.
On a £35,000 salary the gap between salary sacrifice and relief at source is about £12 a month on the payslip. Check which method your scheme uses and select it in the salary sacrifice calculator or the pension contribution calculator.
6. Student loan repayments follow the pay period and the NI-able pay
Repayments are 9% of pay above the plan threshold for the period, using the same pay figure as National Insurance, and like National Insurance they are worked out each payslip on its own. A bonus month produces a large one-off repayment that an annual calculator spreads across twelve months. Salary sacrifice pension contributions reduce the repayment, because they reduce NI-able pay; relief at source contributions do not. If you have both an undergraduate and a postgraduate loan, the two deductions are often shown as a single line. The student loan repayment calculator separates them.
7. Benefits in kind and payrolled benefits
If your employer payrolls benefits, the cash value of a company car or medical insurance is added to your taxable pay each period, so the tax on the payslip is higher than a salary-only calculation. If benefits are not payrolled, they are taxed by reducing your tax code, which takes you back to reason one. Either way the calculator needs the benefit value or the adjusted code to match. The company car tax calculator gives the taxable value.
8. Emergency codes and new jobs
A new employer without your P45 will use an emergency code, shown as 1257L W1, 1257L M1 or 1257L X, or the code 0T. Both tax the current period on its own with either one month’s allowance or none. If you started part-way through the year, you will overpay until HMRC issues a cumulative code, at which point the overpayment is refunded through your pay. A calculator assumes a cumulative code from day one. The emergency tax calculator estimates how much is coming back.
9. Deductions that no tax calculator includes
Anything voluntary or court-ordered sits outside the tax calculation: union subscriptions, a season ticket loan, a Cycle to Work scheme, sharesave, charity giving, an attachment of earnings order or a direct earnings attachment, recovery of a pay advance, or an overpayment being clawed back. These appear in the deductions column and reduce net pay without changing tax or National Insurance. Add them up separately and compare the payslip’s net pay before these items with the calculator’s figure.
Rounding and the 52-week year
Small differences of a few pence to a couple of pounds are normal. HMRC’s PAYE tables round allowances to whole pounds per period (£1,048 rather than £1,047.50), payroll software rounds tax to the penny, and a year has 52.14 weeks rather than 52, so weekly figures multiplied by 52 never reconcile exactly to an annual salary. A calculator that reports round pounds will differ from a payslip by that much and no more.
How to reconcile a payslip in five minutes
- Read the tax code and enter it into the calculator exactly, including any W1, M1 or X marker.
- Set the pay frequency to match the payslip.
- Choose the pension method your scheme uses and enter the same percentage.
- Compare taxable pay to date and tax paid to date against your own running total; if you changed job or had a gap this year, cumulative PAYE explains the difference.
- Treat National Insurance and student loan as per-period figures and check them against the thresholds above rather than against an annual figure.
If a line still does not match after that, the calculation belongs to payroll and the code belongs to HMRC. Payroll can show you their working; HMRC can change the code through the HMRC app or the PAYE helpline. For what each abbreviation on the slip means, see the payslip abbreviations guide.
Information, not financial advice. Figures are the published 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 with your payroll department before acting on them.