Gross salary vs net salary: what actually reaches your bank?
Gross salary is the headline amount before deductions. Net salary — often called take-home pay — is what remains after deductions such as Income Tax, National Insurance, pension contributions and, where relevant, student loan repayments.
Gross pay is the starting number
Your gross annual salary is the amount your employer agrees to pay before deductions. It is the number normally shown in a job offer or employment contract.
The full salary before PAYE deductions. A £40,000 gross salary does not mean £40,000 reaches your bank account.
The amount left after deductions. Net salary and take-home pay are usually used to mean the same thing for employed PAYE income.
Income Tax and employee National Insurance are the main statutory deductions. Pension and student loan deductions can reduce take-home pay further.
The standard Personal Allowance is £12,570. Income Tax then applies by band, while employee National Insurance uses its own thresholds and rates.
What reduces gross salary to net salary?
The exact path from gross to net depends on your circumstances. NetSlip models Income Tax, employee National Insurance, pension method and student loan plan, with separate Scottish Income Tax handling. For the underlying thresholds, see the 2026/27 rates guide.
If you already know the amount you want to take home and need to work backwards, use the Required Salary calculator.
Common questions
For most PAYE salary discussions, yes. Both describe the money left after deductions from gross pay.
Gross salary is before Income Tax and National Insurance are deducted.
Tax code, pension method, student loans, Scottish Income Tax and other individual deductions can change take-home pay.