Last updated on:
March 17, 2024
Your net salary, commonly referred to as take-home pay, is the actual amount you receive after your employer makes mandatory deductions from your gross salary. These deductions can include:
- Income Tax
- National Insurance contributions
- Student loan repayments
- Pension contributions
Essentially, your take-home pay is the portion of your earnings that lands in your bank account each payday, after all, statutory deductions have been applied.
Key Points About Your Net Salary
- PAYE System: Your employer utilises the Pay As You Earn (PAYE) system to automatically deduct taxes and other contributions from your gross salary.
- Tax Code Accuracy: The amount of Income Tax deducted is determined by your tax code. The most prevalent tax code for the tax year 2023/24 is 1250L. If your tax code diverges from this, it's possible that you're either paying too much or too little tax. It's advisable to review your tax code carefully and consult with your employer or check out a comprehensive tax code guide for more clarity.
