Take-Home Pay Calculator

How Take-Home Pay Is Calculated

Your take-home pay (net salary) is what remains after all statutory deductions are subtracted from your gross salary. These deductions typically include income tax, social insurance contributions, and pension. The exact calculation varies significantly by country.

Nigerian PAYE Tax Explained

Nigeria uses a progressive income tax system administered by FIRS. The Consolidated Relief Allowance (CRA) provides significant tax relief: you receive the higher of ₦200,000 or 1% of your gross income, plus an additional 20% of your gross income, all tax-free. The remaining taxable income is then taxed progressively from 7% to 24% across six bands.

UK Income Tax and NI 2025/26

The UK personal allowance is £12,570, meaning you pay no tax on the first £12,570 of earnings. The basic rate of 20% applies from £12,571 to £50,270, the higher rate of 40% from £50,271 to £125,140, and the additional rate of 45% above £125,140. National Insurance adds further deductions at 8% and 2%.

US Federal Tax and FICA

The US uses seven federal tax brackets for 2025, ranging from 10% to 37%. Additionally, FICA contributions include Social Security (6.2% up to $168,600) and Medicare (1.45% with no cap). State income taxes, which vary from 0% to over 13%, add further complexity.

Effective vs Marginal Tax Rate

Your marginal tax rate is the rate applied to your last dollar of income. Your effective tax rate is your total tax divided by total income — it's always lower than your marginal rate due to progressive taxation. Understanding this distinction prevents the common misconception that earning more always results in less take-home pay.

Pension Contributions

Pension contributions reduce your current take-home pay but provide valuable tax advantages. In Nigeria, employees contribute 8% and employers 10% under PenCom rules. In the UK, auto-enrolment requires minimum 5% employee and 3% employer contributions, with tax relief on employee contributions.