Starting your first job is exciting — until you see your first payslip and wonder where all your money went. Here's a friendly guide to what's happening.
You Won't Take Home Your Full Salary
If your job pays £25,000, you won't receive £25,000. After income tax and National Insurance, you'll take home about £21,292 — that's £1,774 per month. Use our salary calculator to check your exact figure.
What Gets Deducted?
Income tax: You get £12,570 tax-free (your personal allowance). Everything above that is taxed at 20%. On £25,000, you pay about £2,486 in income tax.
National Insurance: You pay 8% on earnings between £12,570 and £50,270. On £25,000, that's about £993.
Student loan: If you went to university, repayments start automatically once you earn above the threshold. Check your repayment.
Pension: You'll be auto-enrolled into a workplace pension. The minimum is 5% of qualifying earnings from your pay, plus 3% from your employer. This is a good thing — don't opt out.
Your Tax Code
You should receive tax code 1257L. If your payslip shows a different code (especially BR, 0T, or anything with W1/M1), your tax might be wrong. Contact HMRC or your employer.
Don't Panic About Month 1
Your first payslip might look weird. If you started mid-month, you'll only be paid for part of the month. If your employer didn't have your details yet, you might be on emergency tax. This usually sorts itself out within a couple of months, and any overpaid tax is automatically refunded through PAYE.
See what you'll actually take home
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