Understanding Your Pay: From Hourly Rate to Take-Home

Whether you are comparing job offers, negotiating a raise, or planning your budget, knowing how to work out my take home pay is essential. The starting point is your gross pay – either an hourly rate or an annual salary – but the final amount you receive after deductions depends on several factors, including your region, seniority, and tax code.

The Basic Conversion: Hourly to Annual

The standard formula to convert an hourly rate to an annual salary is:

Annual gross pay = hourly rate × contracted hours per week × 52 weeks

Most full-time roles in the UK assume a 37.5-hour week (though some use 35, 37, or 40 hours). For example, at the median hourly earnings of £19.67 (ONS ASHE 2025), a 37.5-hour week gives:

£19.67 × 37.5 × 52 = £38,361 (close to the ONS median annual figure of £39,039).

If you are paid the National Living Wage of £12.71 per hour (from April 2026), the same calculation gives:

£12.71 × 37.5 × 52 = £24,784.50 gross per year.

Use our Hourly to Salary tool to run your own numbers.

Regional Differences in UK Pay

Pay varies significantly across the UK. The ONS Annual Survey of Hours and Earnings (ASHE) publishes regional breakdowns, but the headline median of £39,039 masks wide variation. London and the South East typically have higher median earnings, while other regions lag behind. For example, median full-time pay in London is often 20–30% higher than in Wales or the North East. However, the cost of living also differs, so a higher salary does not always mean higher disposable income.

If you are looking at a job in London, check whether the employer offers a London weighting or London allowance. This is an extra payment on top of your base salary, and it is subject to the same tax and NI deductions. Our salary data page includes regional benchmarks where available.

Seniority and Occupation

Seniority also drives large pay differences. The ONS median covers all full-time employees, but entry-level roles pay less, and senior management roles pay much more. For instance:

• Apprentice and under-18 rates: £8.00 per hour (2026/27) → £15,600 per year at 37.5 hours.
• Age 18–20 rate: £10.85 per hour → £21,157.50 per year.
• National Living Wage (21+): £12.71 per hour → £24,784.50 per year.
• Median hourly (all full-time): £19.67 → £38,361 per year.
• Higher-skilled roles (e.g., managers, professionals) can command £30–£50 per hour or more.

If you are in a profession with published pay scales (such as NHS or teaching), those scales are set nationally but may include location allowances. Always check the specific pay band for your role and region.

From Gross to Net: Tax and National Insurance

Once you have your gross annual figure, you need to deduct Income Tax and National Insurance to work out my take home pay. For the 2026/27 tax year, the key thresholds are:

• Personal Allowance: £12,570 (tax-free).
• Basic rate (20%): £12,571 to £50,270.
• Higher rate (40%): £50,271 to £125,140.
• Additional rate (45%): over £125,140.
• National Insurance (Class 1): 8% on earnings between £12,570 and £50,270, then 2% above.

For a full-time worker on the median £39,039, the approximate deductions are:

• Income Tax: 20% on £26,469 = £5,294.
• National Insurance: 8% on £26,469 = £2,118.
• Total deductions: ~£7,412.
• Net annual: ~£31,627 (about £2,636 per month).

These figures assume no pension contributions, student loan repayments, or salary sacrifice. Use our calculator to adjust for your personal circumstances.

Overtime and Marginal Rates

Extra hours are taxed at your marginal rate – the rate that applies to your last pound of earnings. For a basic-rate taxpayer, that is 20% tax + 8% NI = 28% total, so you keep 72p for every extra pound earned. Once your total pay exceeds £50,270, the marginal rate becomes 40% tax + 2% NI = 42%, leaving 58p. If you have a student loan (Plan 2), an additional 9% is deducted, leaving just 49p.

This is why it is important to work out my take home pay for overtime before agreeing to extra hours. The net gain may be smaller than you expect.

Practical Tips for Accurate Calculation

1. Know your contracted hours. If your contract says 37.5 hours, use that. If you work variable hours, use an average.
2. Check your holiday pay. If your hourly rate includes rolled-up holiday pay, your annual figure will be higher than your base rate suggests.
3. Include London weighting or other allowances. Add these to your base salary before calculating.
4. Use a reliable calculator. Our Hourly to Salary tool lets you enter your rate, hours, and tax code to get a personalised estimate.

For more context on UK pay benchmarks, visit our salary articles and topics pages.

Summary

To work out my take home pay, start with your hourly rate or annual salary, apply the conversion formula, then subtract tax and NI based on your personal allowance and marginal rates. Remember that regional and seniority differences mean the national median is just a starting point. Always check your contract and use official GOV.UK guidance for the most accurate figures.