After Tax Calculator
Where Your Money Goes
Full Breakdown: £120,000 Salary
| Deduction | Annual | Monthly | Weekly |
|---|---|---|---|
| Gross Salary | £120,000.00 | £10,000.00 | £2,307.69 |
| Income Tax | £39,675.00 | £3,306.25 | £762.98 |
| National Insurance | £4,410.60 | £367.55 | £84.82 |
| Take-Home Pay | £75,914.40 | £6,326.20 | £1,459.89 |
Understanding Your £120,000 Salary After Tax
If you earn £120,000 per year in the UK, your employer will deduct £39,675.00 in income tax and £4,410.60 in National Insurance contributions during the 2025/26 tax year. This leaves you with a net take-home pay of £75,914.40 annually. Use our after tax calculator to adjust for pension and student loan deductions.
Mortgage Affordability on £120,000
UK mortgage lenders typically offer 4.5 times your gross salary as a maximum loan. On £120,000, that gives you borrowing power of approximately £540,000. With a 10% deposit of £54,000, you could purchase a property worth up to £594,000. At current interest rates (around 5.5%), monthly repayments on this mortgage would be roughly £2,475 — representing 39% of your £6,326 monthly take-home pay. Financial advisers generally recommend keeping mortgage payments below 28-33% of net income.
How Your £120,000 Is Taxed Band-by-Band
Your tax is split across bands: £37,700 taxed at 20% (= £7,540), and £79,730 taxed at 40% (= £31,892). Your Personal Allowance has been reduced to £2,570 due to the taper above £100,000. In total, your combined income tax of £39,675 and National Insurance of £4,411 produce an effective deduction rate of 36.74%.
Student Loan Repayments at £120,000
If you have a student loan, repayments are deducted at 9% of earnings above your plan's threshold. On Plan 2 (post-2012 graduates), at £120,000 you'd repay £8,343/year (£695/month) above the £27,295 threshold. On Plan 1 (pre-2012), repayments would be £8,819/year above the £22,015 threshold. Plan 2 loans are written off after 30 years — if your salary stays around £120,000, calculate whether you'd clear the balance before then or whether repayments are effectively an additional tax.
National Insurance on £120,000
Your NI bill of £4,411 breaks down into two parts: £3,016 at 8% on earnings between £12,570 and £50,270, plus £1,395 at 2% on earnings above £50,270. Unlike income tax, NI has no personal allowance — it applies from the first pound above the threshold. NI contributions build your entitlement to the State Pension (currently £221.20/week at the full new State Pension rate), Maternity Allowance, and bereavement benefits. You need 35 qualifying years for the full State Pension.
Salary Sacrifice Savings at Your Tax Rate
At £120,000, your combined marginal rate (income tax + NI) is approximately 62%. Salary sacrifice schemes let you exchange gross salary for benefits tax-free, saving you that full percentage. For example: a £1,000 cycle-to-work scheme saves you £620; an electric car scheme worth £5,000 saves £3,100; nursery fees of £10,000 through salary sacrifice could save £6,200. These savings are immediate and guaranteed — unlike investments, there's no risk involved.
For comparison: someone earning £50,000 per year takes home £39,520, and someone earning £200,000 per year takes home £117,158.
Monthly & Weekly Take-Home
Your £120,000 salary breaks down to £6,326.20 per month, £1,459.89 per week, or £291.98 per working day. If you work a standard 37.5-hour week, that's approximately £36.50 per hour after tax.
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