Reference

Take Home Pay Calculator

Take-home pay is what lands in your account after every statutory deduction has been removed from gross salary. Income tax is only part of it. Social insurance, student loan repayments, and pre-tax retirement contributions all take a bite before the bank transfer hits. This page walks through what gets deducted in the UK, US, and Canada, with worked monthly examples for a typical salary in each country.

What gets deducted from your pay

The three big payroll deductions in every English-speaking country are income tax, social insurance, and pre-tax retirement contributions. The headline rates differ but the structure is similar: a progressive income tax, a flat or stepped social insurance percentage, and a tax-deferred retirement account that comes off gross income.

UK student loans are deducted at source by HMRC at 9% above a plan-dependent threshold (Plan 1, 2, 4, 5, or Postgraduate). US federal student loans are repaid outside payroll under income-driven repayment or standard schedules. Canadian federal and provincial student loans are repaid by direct debit after a six-month grace period.

Quick take-home examples

The numbers below assume a single filer with no student loan, no pension or retirement contribution, and no state or provincial tax (figures shown are federal plus social insurance only). Add state or provincial income tax to the US and Canada lines for your actual net.

UK: £50,000 gross salary

US: $80,000 gross salary

Canada: $70,000 gross salary

Provincial income tax in Canada lands between roughly 5% and 25% on top of federal rates depending on the province and income level. State income tax in the US ranges from zero in nine states to over 13% at the top of California's schedule. UK

How to increase your take-home pay

The lever with the highest payoff for most employees is a pre-tax retirement contribution. UK salary sacrifice removes both income tax and National Insurance on the sacrificed amount. A US 401(k) traditional contribution removes federal income tax and most state income tax, though FICA still applies. A Canadian RRSP contribution removes federal and provincial income tax at the marginal rate, with CPP and EI unaffected.

For higher earners crossing a bracket, contributing just enough to land below the threshold has an outsized effect. A UK earner on £52,000 sacrificing £1,730 into pension drops below the 40% band, saving 40% on every pound of that contribution rather than the 20% they would have saved at lower income. The same logic applies to the US 24% to 22% boundary and the Canadian 26% to 20.5% step.