What's the take-home on £40,000 in 2026/27?

The full breakdown for England, Wales and Northern Ireland

Tax and NI total £7,680, or 19.2%; about 81p of each pound is kept. No workplace pension is assumed, although auto-enrolment would normally take one — the pension item further down puts a figure on it.

The Scottish version is different

With £10,474 of pay in the 21% intermediate band, the extra point costs £104.74 — £65.07 more than the 19% starter rate saves.

What £40,000 looks like in the basic-rate zone

£40,000 is firmly inside basic rate. Marginal tax + NI on each extra pound is 28% (20% income tax + 8% employee NI). The £1,000 Personal Savings Allowance applies in full and Marriage Allowance is available if your partner earns under £12,570.

At this band, salary sacrifice into a pension converts pre-tax pounds into pension at a relief rate of 28% (you give up 72p of take-home to put £1 into the pension). That's a 39% boost to the contribution. Helpful but not transformative — the relief geometry becomes much more favourable above £50,270.

Two specific levers to consider:

• LISA — if you're under 40 and saving for a first home or retirement, the 25% government bonus turns a £4,000 contribution into £5,000, a 25% boost on what you put in. Pension still wins for retirement-only savings via employer match, but LISA wins for first-home savings. See the LISA calculator.
• ISA over GIA — interest above the £1,000 Personal Savings Allowance is taxed at 20%, and dividend income above £500 at 10.75%. Wrapping savings and investments in an ISA avoids both — see ISA vs GIA.

The first rung above the median — and the jobs that live there

£40,000 is the point on this ladder where you first cross into the better-paid half of full-time Britain. The ONS bulletin Employee earnings in the UK: 2025, published on 23 October 2025, puts the full-time median at £39,039. A £40,000 salary clears it by £961 — about 2.5%. It is still £4,203 short of the 60th percentile (£44,203) and £14,009 short of the 75th (£54,009), so crossing the median buys you the halfway mark and not much more.

Widen the measure to all employees rather than full-timers only and £40,000 looks stronger: it beats the all-employee median of £32,890 by £7,110 and sits above the all-employee 60th percentile of £38,000. The full-time median itself rose 4.3% in a year, from £37,439 in April 2024, which is why this rung keeps moving under people's feet.

This is also the densest part of the occupational map. Table 14.7a of the same survey gives median gross annual pay for full-time employee jobs, and the occupations that land inside 3% of £40,000 include the two largest skilled-trade and transport groups in it: metal working production and maintenance fitters, on £40,760 across 209,000 full-time jobs, and large goods vehicle drivers, on £39,905 across 187,000. Electricians and electrical fitters sit at £39,647 (91,000 jobs), business and related research professionals at £41,128 (85,000), public services associate professionals at £39,537 (71,000) and community nurses at £40,897 (43,000). Estimators, valuers and assessors (£39,634), telecoms network installers (£39,998), chemical scientists (£39,983), authors and translators (£39,459) and conservation professionals (£40,083) all land within a few hundred pounds of the same number. No other rung on this ladder is anchored by occupations employing this many people.

Is it ever worth delaying a pension contribution at £40,000?

This is the one income band on the ladder where the question is genuinely open. At £40,000 you sit £10,270 below the £50,270 higher-rate threshold, so a pension contribution attracts 20% income tax relief — an effective 28% through salary sacrifice, once the 8% NI main rate is counted. The same contribution made after you cross £50,270 attracts 40%, or 42% by sacrifice. Nowhere else does waiting change the relief rate by that much.

Deferred contributions are not lost. The annual allowance for 2026/27 is £60,000, and unused allowance can be carried forward from the previous three tax years provided you were a scheme member in them, so headroom you do not use this year is banked rather than burned. Below about £35,000 the absolute sums are too small for the difference in relief to matter; from £50,270 upwards you already have 40% relief and there is nothing to wait for. Only here does the arithmetic point both ways.

Three things cut against waiting. Employer matching is usually forfeited if you cut your own contribution, and a match is worth more than any relief rate. Compounding time cannot be bought back. And the £50,270 threshold is frozen until 5 April 2031 under Budget 2025, so ordinary pay rises will carry you over it sooner than an inflation-linked threshold would — the wait may be shorter than you expect, but the years of growth you skipped are gone for good. For scale, income tax and NI at £40,000 come to £5,486 and £2,194.40, an effective 19.2% of gross pay.

£40,000 is where every student loan plan bites at once

At £40,000 all five student loan plans take money at once, and the spread between them is wider in cash terms than at any lower rung. Using the 2026/27 repayment thresholds, with 9% charged on income above the threshold for every undergraduate plan:

• Plan 5 (£25,000 threshold) — £1,350.00 a year, £112.50 a month
• Plan 1 (£26,900) — £1,179.00 a year
• Plan 2 (£29,385) — £955.35 a year
• Plan 4 (£33,795, Scottish-domiciled students) — £558.45 a year, up sharply from £108.45 at £35,000 and nothing at all at £25,000 or £30,000
• Postgraduate Loan (£21,000, charged at 6%) — £1,140.00 a year

A graduate on Plan 2 with a Postgraduate Loan hands over £2,095.35 a year — 5.2% of gross — on top of £7,680.40 of income tax and National Insurance. That takes total deductions to £9,775.75, or 24.4% of gross pay, and take-home to £30,224.65.

The gap between plans is closing. At £30,000, among the plans that were biting at all, the widest took 8.1 times as much as the narrowest; at £40,000 the ratio is 2.4 to 1 (Plan 4 at £558.45 against Plan 5 at £1,350.00). It narrows further at every rung above this one, because the thresholds are fixed cash amounts while the 9% rate is common to all four undergraduate plans — the more you earn, the less the threshold you were assigned matters.

What this calculation does not include

• Pension contributions. Auto-enrolment charges 8% of qualifying earnings — the slice of pay between £6,240 and £50,270. At £40,000 that slice is £33,760, so the statutory minimum is £2,700.80 a year: £1,688 from you and £1,012.80 from your employer. You are a basic-rate taxpayer across the whole contribution, so relief is 20% and there is nothing to reclaim through Self Assessment. Sacrificing that £1,688 costs £1,215.36 of take-home once 20% tax and 8% NI are saved, pulling the £32,320 above down to about £31,105.
• Student loan repayments. All five plans bite at this salary, as set out above, and every pound comes straight out of the £32,320: £1,350 a year on Plan 5 leaves £30,970, while Plan 2 plus a Postgraduate Loan leaves £30,224.65. None of it reduces taxable pay, so the income tax and NI lines in the table do not move at all.
• Bonuses, overtime and one-off payments. You have £10,270 of basic-rate headroom, which is unusually generous for this ladder — a bonus up to that size is taxed at the same 28% marginal rate as your salary, so £5,000 is worth £3,600 net. Beyond £50,270 the rate on the excess jumps to 42%: a £12,000 bonus yields £7,394.40 on the first £10,270 and £1,003.40 on the remaining £1,730, £8,397.80 in total. The bonus and pay-rise calculator shows where your own headroom runs out.
• Benefits in kind. A company car, private medical cover or an interest-free loan is collected through your tax code rather than deducted from pay, and it carries income tax only — the Class 1A National Insurance is your employer's bill, not yours. At £40,000 that means 20p in the pound: £2,000 of taxable benefit costs you £400 a year, roughly £33 off the £2,693 a month above. It also eats into the £10,270 of headroom, because benefits count towards the £50,270 threshold in their own right.
• Multiple jobs. A second employer normally operates a BR code, taxing every pound of that job at 20% with no Personal Allowance applied. At £40,000 that is usually the right answer rather than a problem: with £10,270 of basic-rate room, a second job paying less than that is taxed correctly first time, unlike at higher salaries where BR under-deducts. National Insurance is worked out separately for each employment, so a second job paying under £242 a week attracts none at all.

Sources and methodology

Sources: GOV.UK 2026/27 Income Tax, National Insurance and Scottish Income Tax rates, plus annual allowance guidance, student loan thresholds and ONS ASHE 2025. Methodology · Disclaimer

Other take-home pay scenarios

Below it, £35,000 has the densest cluster of occupations on the ladder; above it, £45,000 leaves only £5,270 before the higher rate. The salary hub covers the rest.