How the Calculations Work

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 (2026 to 2027) for income tax and NI.
• HMRC Student Loans: SL3: Calculate deductions (2026 to 2027) and Repaying your student loan.
• Teachers’ Pensions: Member contribution bands effective from 1 April 2026.

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 2026–27, the main bands remain frozen at:

• 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If your adjusted net income exceeds £100,000, your personal allowance tapers by £1 for every £2 above £100,000 (fully withdrawn at £125,140).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 2026–27 employee rates (frozen until 2028):

• 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 2026:

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: £26,900 threshold; 9% on income above this.
• Plan 2: £29,385 threshold; 9% on income above this.
• Plan 4 (Scotland): £33,795 threshold; 9% on income above this.
• Plan 5: £25,000 threshold; 9% on income above this (Active from April 2026).
• Postgraduate Loan (PGL): £21,000 threshold; 6% on income above this.

Note: If you have both an undergraduate plan and a postgraduate loan, the deductions are calculated separately and added together.

• Figures reflect official 2026–27 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 until the September 2026 update.
• 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.