Why Is My Take-Home Pay So Low?

Your take-home pay is your gross salary minus all deductions. If it feels low, the first step is to check your payslip to see exactly what's being deducted and why.

Common reasons your take-home pay might be low

Emergency tax code

If you're on an emergency tax code (often shown as 1257L W1 or 1257L M1), you're not getting the benefit of your full Personal Allowance spread across the year. This means you're paying more tax than you should be. Emergency tax is usually applied when you start a new job or HMRC doesn't have enough information about your income. Once your correct tax code is applied, you'll usually get a refund automatically or see your tax adjusted in future pay periods.

Incorrect tax code

Your tax code determines how much tax-free income you're entitled to. If your code is wrong, you might be paying too much tax. Check your payslip – your tax code should match what HMRC has sent you. If it doesn't, or if you think it's incorrect, contact HMRC or check your personal tax account online.

High deductions

Several deductions can reduce your take-home pay:

• Large pension contributions (especially if you've recently increased them)
• Student loan repayments (if you have a student loan and earn above the threshold)
• Benefits in kind (company car, private healthcare) which reduce your tax-free allowance
• Underpaid tax from previous years being collected through your current tax code

Tax band changes

If your income has increased and you've moved into a higher tax band, you'll pay a higher rate of tax on the portion of your income above the threshold. This is normal, but it can make your take-home pay feel lower than expected, especially if the change happened mid-year.

Multiple jobs

If you have a second job, your Personal Allowance is usually applied to your main job only. Your second job will be taxed at the basic rate from the first pound, which can make your take-home pay from that job seem low.

What you can do

Start by checking your payslip carefully. Look at each deduction and compare it to what you expect based on your income and circumstances. Use our salary calculator to estimate what your take-home pay should be – if there's a significant difference, something may need correcting.

If you're on an emergency tax code, this should resolve automatically once HMRC has the correct information. If you think your tax code is wrong, you can check it online through your personal tax account on GOV.UK or contact HMRC directly.

Remember that some deductions are normal and expected – income tax and National Insurance are mandatory, and pension contributions and student loan repayments are common deductions that reduce your take-home pay but serve important purposes.

Related guides

For more information about UK tax and how take-home pay is calculated, see our UK Tax Guide. If your take-home pay changes from month to month, read our guide on why take-home pay changes.