How the Calculations Work
Last updated: 12 August 2025.
We prioritise official sources and update when government guidance changes:
- Department for Education (DfE): School teachers’ pay and conditions document 2025 (valid from 1 September 2025).
- HMRC: Rates and thresholds for employers (2025 to 2026) for income tax and NI.
- HMRC Student Loans: SL3: Calculate deductions (2025 to 2026) and Repaying your student loan.
- Teachers’ Pensions: Member contribution bands effective from 1 April 2025.
We aim for accuracy but cannot guarantee completeness. Always verify critical decisions against the linked official guidance or your payroll.
Tax codes set your personal allowance and how PAYE tax is calculated. Common examples:
- 1257L - Standard tax code with a personal allowance of £12,570.
- NT - No tax deducted.
- BR - All income taxed at basic rate (20%), no personal allowance.
- D0 - All income taxed at higher rate (40%), no personal allowance.
- D1 - All income taxed at additional rate (45%), no personal allowance.
- 0T - No personal allowance (e.g., missing starter info).
- K*** - Negative allowance; HMRC adds an amount to your taxable pay.
- M / N - Marriage Allowance received / transferred (±10% of the standard allowance).
Codes prefixed with C indicate Welsh rates; codes prefixed with S indicate Scottish rates (different bands/rates).
For England, Wales and Northern Ireland in 2025–26, the main bands are:
- Personal Allowance: up to £12,570 - 0%
- Basic Rate: £12,571 to £50,270 - 20%
- Higher Rate: £50,271 to £125,140 - 40%
- Additional Rate: over £125,140 - 45%
If your adjusted net income exceeds £100,000, your personal allowance tapers by £1 for every £2 above £100,000 (fully withdrawn at £125,140). Note: Scotland has its own rates and bands.
We apply the 2025–26 employee rates:
- 8% on earnings between £12,570 and £50,270.
- 2% on earnings above £50,270.
Thresholds are aligned with income tax for simplicity (Primary Threshold £12,570; Upper Earnings Limit £50,270).
Pension contributions are deducted from pensionable pay before income tax, reducing taxable income. Member contribution bands from 1 April 2025:
| Annual Salary Rate (from 1 Apr 2025) | Member Contribution Rate |
|---|---|
| Up to £34,872.99 | 7.4% |
| £34,873.00 to £46,943.99 | 8.9% |
| £46,944.00 to £55,660.99 | 9.9% |
| £55,661.00 to £73,768.99 | 10.5% |
| £73,769.00 to £100,590.99 | 11.6% |
| £100,591.00 and above | 12.0% |
Employer contribution rates are separate and not shown here.
We calculate student loan deductions after tax and NI adjustments, based on these thresholds:
- Plan 1: £26,065 threshold; 9% on income above this.
- Plan 2: £28,470 threshold; 9% on income above this.
- Plan 4 (Scotland): £32,745 threshold; 9% on income above this.
- Postgraduate Loan (PGL): £21,000 threshold; 6% on income above this.
Plan 5: Repayments do not start until April 2026 at the earliest (threshold £25,000, 9%). If you’re on Plan 5, no payroll deductions are due in 2025–26.
- Figures reflect official 2025–26 rules. Some employers may apply changes slightly later - your payslip is definitive.
- Regional pay scales (Inner/Outer London, Fringe, England excluding London) follow the STPCD 2025 values; academies may vary.
- If your tax code uses Scottish rates (S prefix), income tax bands differ; ensure your code is correct.
- This overview is informational and not financial advice.