Understanding Take Home Pay
Income Tax
Tax rates and bands are usually updated every April. The 2025/26 tax bands and rates are as follows:
Rate |
Threshold from April 2025 (£) |
Percentage (%) |
| Basic | 37,700 |
20 |
| Higher | 37,701 to 125,140 |
40 |
| Additional | Over 125,140 | 45 |
In addition, there is an allowance, below which no tax is deducted. The current basic personal allowance is £12,570. If you are coming from abroad or you do not have a current P45, you will be taxed without any allowances until we receive notification from HMRC of your allowance code.
Please note that tax is applied on a cumulative basis every month; you do not earn £12,570 without paying any tax at all, rather the allowance is spread equally over the year.
If you decide to join one of the University’s pension schemes or are auto-enrolled into a pension scheme, then tax is applied to your pay after your pension contribution has been deducted.
(HMRC have a website that gives a useful overview of UK tax)
National Insurance
National Insurance rates are usually updated every April. The current NI rates and bands are as follows:
Earnings limits per month |
Employee's contribution |
| Up to £1,048 |
0% |
| £1,049 to £4,189 | 8% |
| Over £4,189 |
2% |
Please note that NI is not cumulative, if you earn in excess of £1,048 any month, you will pay NI on the amount above that.
Pension
The University of Warwick operates 2 pension schemes: grades FA1-FA4 may join or be auto-enrolled into University of Warwick Defined Contribution Plan, FA5-FA9 may join or be auto-enrolled into USS.
The current contribution rates are:
Scheme |
Contribution rate (%) |
| UWPS (Defined Benefits Scheme) not available to new starters |
5.5 |
| Defined Contribution Plan | 3,4 or 5 |
| Defined Contribution Plan (auto-enrollment) |
3 |
| USS |
6.1 |
Take-home pay
An individual’s monthly take-home pay will obviously depend upon their individual circumstances. As a very general guidance based on the standard personal allowance of 1257L your take-home pay on the following salaries would be approximately:
Salary (£) |
Gross pay per month (£) |
Tax (£) |
NI(£) |
Pension (£) |
Take-home pay (£) |
| 25,000 (opted out of a pension scheme) |
2,083 |
207 |
83 |
0 |
1,793 |
| 25,000 (in DCP 5% salary sacrifice pension scheme) |
2,083 |
186 |
75 |
104 |
1,718 |
| 30,000 (opted out of a pension scheme) |
2,500 |
291 |
116 |
0 |
2,093 |
| 30,000 (in USS salary sacrifice pension scheme) |
2,500 |
260 |
104 |
153 |
1,984 |
| 50,000 (opted out of a pension scheme) |
4,167 |
624 |
250 |
0 |
3,293 |
| 50,000 (in USS salary sacrifice pension scheme) |
4,167 |
573 |
229 |
254 |
3,110 |
| 80,000 (opted out of a pension scheme) |
6,667 |
1,619 |
301 |
0 |
4,746 |
| 80,000 (in USS salary sacrifice pension scheme) |
6,667 |
1,457 |
293 |
407 |
4,511 |