NHS Band VSM Net Pay 2023/2024

Within the realm of Very Senior Managers (VSM) in the NHS, there is a diverse range of roles that includes Directors specializing in areas such as Finance, Planning, or Workforce. Additionally, Deputy Chief Executive Officers, Chief Operating Officers, and Chief Executives hold key positions within this category. The salaries offered to individuals in these roles can vary significantly depending on various factors.

For instance, in smaller NHS trusts with a turnover of less than £200 million, a Corporate Governance Director can expect to receive an annual salary starting from £75,000. On the other hand, in larger trusts with a turnover exceeding £500 million, a Chief Executive’s annual salary can reach as high as £280,500.

It is important to note that these salary structures are further divided into three distinct levels: Lower quartile, Median, and Upper Quartile, each representing different salary ranges.

These distinctions are implemented to ensure fairness and transparency in the remuneration of Very Senior Managers across the NHS. By categorizing salaries into quartiles, it allows for benchmarking against industry standards and internal comparisons within similar roles.

It is worth noting that the mentioned salary ranges provide a general overview of what can be expected for specific VSM positions. However, it is essential to consider additional factors such as years of experience, qualifications, and specific responsibilities when determining the precise remuneration for an individual in these roles.

The following lists just a few examples of gross salary for different types of VSM roles and their respective net (take-home) salaries:

Deputy Chief Executive Officer (Lowest Paid) – Very Senior Manager Pay Point

(£120,000 per annum)

Effective from 1st April 2023, the annual salary for a Deputy Chief Executive Officer (lowest paid) occupying the Very Senior Manager pay point within the NHS will amount to £120,000 Prior to any deductions, this equates to a monthly income of £10,000.00. Upon reaching this NHS pay point, an individual will be responsible for monthly contributions towards National Insurance, NHS Pension, and Income Tax.

Specifically, a person on this pay point will contribute £493.14 towards National Insurance each month. Additionally, they will allocate £1350.00 per month towards NHS Pension contributions. Moreover, Income Tax deductions amounting to £2412.67 per month will be applicable. Consequently, after all the deductions have been accounted for, their net (take-home) pay will amount to £5,744.19 per month.

The calculations provided are contingent upon a 13.5% pension rate, which applies to earnings surpassing £72,031 per year. Regarding Income Tax, a rate of 20% is applied to earnings falling within the range of £12,570 to £50,270 annually, while a 40% tax rate is applicable to earnings between £50,270 and £125,140.

In terms of National Insurance (NI), a rate of 12% is assigned to all earnings ranging from £1,048.01 to £4,189 per month. However, for earnings surpassing £4,189 per month, a 2% NI rate is implemented.

“The net pay received by NHS employees expressed as a percentage of their total salary is 57%. In practical terms, this indicates that for every £1 earned, 57 pence is retained as take-home pay while 43 pence is deducted for various contributions and taxes.”

In the event of a promotion or upward movement within this pay band, transitioning from the role of Deputy Chief Executive Officer (lowest paid) on the Very Senior Manager pay point to that of Director of Finance (lowest paid) on the Very Senior Manager pay point, an individual would experience an increase in earnings amounting to £207.92 per month after considering all applicable deductions. This cumulative increase would amount to £416.67 over the course of a year.

Director of Finance (Lowest Paid) – Very Senior Manager Pay Point

(£125,000 per annum)

Effective from the 1st of April 2023, taking into account the 5% NHS pay rise, the annual salary for a Director of Finance (lowest paid) on the Very Senior Manager pay point will be £125,000. This translates to a monthly income of £10,416.67 before any deductions.

In this pay point, an individual will contribute £501.47 per month towards National Insurance, £1406.25 per month towards NHS Pension contributions, and £2556.83 per month towards income tax.
Consequently, their net take-home pay will amount to £5,952.11 per month.

The calculations provided are based on a pension rate of 13.5%, which applies to earnings exceeding £72,031 per year. In terms of income tax, there is a 20% tax rate applicable to earnings falling between £12,570 and £50,270 per year, and a 40% tax rate for earnings between £50,270 and £125,140 per year.

Regarding National Insurance (NI), a 12% rate is applied to all earnings ranging from £1,048.01 to £4,189 per month, while earnings above £4,189 per month are subject to a 2% NI rate.

“NHS employees receive a net pay (take-home pay) that amounts to 57% of their total salary. In practical terms, for every £1 earned, approximately 57 pence is retained as net pay, while the remaining 43 pence is deducted for taxes, pension contributions, and other obligations. This percentage reflects the overall portion of income that employees can expect to retain after accounting for various deductions.”

If an individual within this pay band were to be promoted or move up from the position of Director of Finance (lowest paid) on the Very Senior Manager pay point to the role of Corporate Affairs/Governance Director (highest paid) on the same pay point, they would experience a monthly increase of £260.79 in their net income after all deductions. This would amount to a total increase of £416.67 over the course of a month.

Corporate Affairs/Governance Director (Highest Paid) – Very Senior Manager Pay Point

(£130,000 per annum)

Starting from 1st April 2023, taking into account the 5% NHS pay rise, the annual salary for a Corporate Affairs/Governance Director (the highest paid position) on the Very Senior Manager pay point will be £130,000. This equates to a monthly income of £10,833.33 before any deductions are made.

For an individual in this NHS pay bracket, the monthly contributions will amount to £509.81 for National Insurance, £1462.50 for NHS Pension, and £2648.12 for Income Tax. Consequently, their net take-home pay will be £6,212.90 per month.

The calculations provided are based on the 2023/2024 NHS Pension, National Insurance, and Income Tax rates. For earnings exceeding £72,031 per year, a 13.5% pension rate is applied. The Income Tax rate is structured as follows: 20% tax on earnings ranging from £12,570 to £50,270 per year, 40% tax on earnings between £50,270 and £125,140 per year, and 45% tax on earnings surpassing £125,140 per year.

In terms of National Insurance contributions, a 12% rate is applicable to earnings falling between £1,048.01 and £4,189 per month, while a 2% rate is imposed on earnings exceeding £4,189 per month.

“When considering NHS net pay, which represents the take-home pay after deductions, it accounts for approximately 57% of the entire salary. In other words, for every £1 earned, approximately 57 pence is retained while approximately 43 pence is deducted for various obligations.”

If an individual in the Corporate Affairs/Governance Director role, which is one of the highest paid positions on the Very Senior Manager pay point, were to be promoted to the Medical Director position, which is one of the lowest paid positions on the same pay point, they would experience a significant increase in earnings.

Specifically, they would earn an additional £379.79 per month after all necessary deductions have been made, resulting in a total increase of £833.33 overall.

Medical Director (Lowest Paid) – Very Senior Manager Pay Point

(£140,000 per annum)

Effective from 1st April 2023, in accordance with the 5% NHS pay rise, the annual salary for a Medical Director, who occupies the lowest paid position on the Very Senior Manager pay point, will be £140,000. This amounts to a monthly income of £11,666.67 before any deductions are applied. Considering the associated contributions, a person in this NHS pay bracket will contribute £526.47 towards National Insurance, £1575.00 towards NHS Pension, and £2972.50
towards Income Tax on a monthly basis. Consequently, their net (take-home) pay will amount to £6,592.69 per month, ensuring fair compensation for their dedicated service within the healthcare system.

The calculations provided are based on the prevailing financial regulations for the 2023/2024 fiscal year within the United Kingdom’s National Health Service (NHS). Regarding pension contributions, a rate of 13.5% applies to individuals whose earnings exceed £72,031 annually. For Income Tax, the rates vary depending on income brackets: 20% tax is levied on earnings between £12,570 and £50,270 per year, 40% tax is applied to earnings ranging from £50,270 to £125,140 annually, and any earnings surpassing £125,140 are subject to a 45% tax rate.

National Insurance (NI) contributions are determined based on income levels as well. A 12% NI rate is applicable to earnings between £1,048.01 and £4,189 per month, while earnings exceeding £4,189 per month are subject to a 2% NI rate.

“In terms of NHS remuneration, the net pay received, which refers to the take-home pay, constitutes approximately 57% of the total salary. This implies that for every £1 earned, approximately 57 pence is retained while around 43 pence is deducted.”

If an individual within this pay band were to advance or be promoted from the position of Medical Director (lowest paid) on the Very Senior Manager pay point to the role of Chief Executive (lowest paid) on the same pay point, they would experience a monthly increase of £379.79 in their earnings after all necessary deductions have been accounted for. In total, this promotion would result in a cumulative raise of £833.33 in their monthly income.

Chief Executive (Lowest Paid) – Very Senior Manager Pay Point

(£150,000 per annum)

Effective from 1st April 2023, following the implementation of the 5% NHS pay rise, the annual salary for a Chief Executive (lowest paid) on the Very Senior Manager pay point will amount to £150,000. This translates to a monthly pre-deduction income of £12,500.00.

In line with this pay point, an individual in this position will contribute £543.14 per month towards National Insurance, £1687.50 per month towards NHS Pension, and £3296.87 per month towards income tax. Consequently, their net (take-home) pay will amount to £6,972.49 per month.

The calculations are based on a pension rate of 13.5%, which is applicable when earnings surpass £72,031 per year. In terms of Income Tax, there is a 20% tax rate applied to earnings falling within the range of £12,570 to £50,270 per year. For earnings between £50,270 and £125,140 per year, the tax rate increases to 40%.

Any earnings exceeding £125,140 per year are subject to a 45% tax rate. In regard to National Insurance (NI), a 12% rate is applied to earnings ranging from £1,048.01 to £4,189 per month, while a 2% rate is applicable to earnings surpassing £4,189 per month.

“The net pay received by NHS employees, in terms of take-home pay, accounts for approximately 56% of their entire salary. This implies that for every £1 earned, approximately 56 pence is retained, while approximately 44 pence is deducted for various purposes such as taxes, pension contributions, and other deductions.”

If an individual within this salary band were to be promoted or move up from the position of Chief Executive (lowest paid) on the Very Senior Manager pay point to the role of Director of Facilities/Estates (highest paid) on the Very Senior Manager pay point, they would experience an increase of £189.90 in their monthly earnings after accounting for all deductions. This amounts to a total increase of £416.67 overall.

Director of Facilities/Estates (Highest Paid) – Very Senior Manager Pay Point

(£155,000 per annum)

Starting from 1st April 2023, with the implementation of the 5% NHS pay rise, the annual salary for a Director of Facilities/Estates (highest paid) on the Very Senior Manager pay point will amount to £155,000. This translates to a monthly income of £12,916.67 before any deductions are made.

Individuals in this NHS pay category will be subject to various deductions, including £551.47 for National Insurance, £1743.75 for NHS Pension contributions, and £3459.06 for income tax. Consequently, their net (take-home) pay will amount to £7,162.38 per month.

The calculation of deductions is based on a pension rate of 13.5%, applicable to earnings exceeding £72,031 per year. As for income tax, the rates vary depending on the earnings bracket. For earnings ranging from £12,570 to £50,270 per year, the tax rate is 20%.

In the income bracket of £50,270 to £125,140 per year, the tax rate is 40%, and any earnings exceeding £125,140 per year are subject to a tax rate of 45%. Regarding National Insurance (NI), the rate is 12% for all earnings falling between £1,048.01 and £4,189 per month. For earnings surpassing £4,189 per month, the NI rate is 2%.

“In the context of NHS salaries, the net pay, or take-home pay, represents 55% of the total salary earned. This implies that for every £1 earned, 55 pence is retained as net pay, while 45 pence is deducted for various purposes.”

If an individual in this pay band were to be promoted from the position of Director of Facilities/Estates, which is the highest-paid role on the Very Senior Manager pay point, to the role of Director of HR/Workforce, also the highest-paid position on the Very Senior Manager pay point, they would experience an increase in their monthly earnings. Specifically, their income would rise by £379.79 after accounting for all deductions, resulting in a total increment of
£833.33.

Director of HR/Workforce (Highest Paid) – Very Senior Manager Pay Point

(£165,000 per annum)

Effective from 1st April 2023, as part of the 5% NHS pay rise, the annual salary for a Director of HR/Workforce, holding the highest paid position on the Very Senior Manager pay point, will amount to £165,000. This translates to a monthly income of £13,750.00 before any deductions are made. In terms of contributions, an individual on this NHS pay point will be responsible for a monthly National Insurance payment of £568.14, NHS Pension contributions amounting to
£1856.25 per month, and a monthly tax payment of £3783.44. Consequently, their net (take home) pay will total £7,542.17 each month.

The calculation of deductions is based on a pension rate of 13.5% for individuals earning above £72,031 per year. Regarding income tax, the rate is 20% for earnings falling within the range of £12,570 to £50,270 per year. For earnings between £50,270 and £125,140 per year, the tax rate increases to 40%.

Any earnings exceeding £125,140 per year are subject to a tax rate of 45%. As for National Insurance (NI) contributions, the rate stands at 12% for earnings ranging from £1,048.01 to £4,189 per month, while any earnings surpassing £4,189 per month incur a 2% NI rate.

“When considering NHS net pay, which refers to the take-home pay after deductions, it amounts to 55% of the total salary. In practical terms, for every £1 earned, 55 pence is retained while 45 pence is deducted for various obligations and contributions.”

In the event that an individual within this pay band is promoted or moves up from the position of Director of HR/Workforce, which is one of the highest paid roles on the Very Senior Manager pay point, to the role of Nursing Director, also one of the highest paid positions on the Very Senior Manager pay point, they would experience a monthly increase of £379.79 in their earnings after all deductions have been accounted for. This translates to a total increase of £833.33 in their overall monthly income.

Nursing Director (Highest Paid) – Very Senior Manager Pay Point

(£175,000 per annum)

Effective from 1st April 2023, following the implementation of the 5% NHS pay rise, the annual salary for a Nursing Director, holding the highest paid position on the Very Senior Manager pay point, will amount to £175,000. Prior to any deductions, this translates to a monthly income of £14,583.33.

However, it’s important to note that individuals on this NHS pay point will be subject to various deductions. Specifically, they will contribute £584.81 per month towards National Insurance, £1968.75 per month towards NHS Pension contributions, and £4107.81 per month towards income tax. Consequently, their net take-home pay will amount to £7,921.96 per month.

The calculation of the deductions is based on several factors. Firstly, the pension rate of 13.5% is applied for earnings exceeding £72,031 per year. For income tax, there are different rates depending on the earnings bracket. A 20% tax rate is applicable for earnings falling between £12,570 and £50,270 per year, while a 40% tax rate is applied for earnings between £50,270 and £125,140 per year. Any earnings above £125,140 per year are subject to a 45% tax rate.

When it comes to National Insurance (NI) contributions, the rate is determined based on the monthly earnings. For earnings ranging between £1,048.01 and £4,189 per month, a 12% NI rate is applicable. For earnings exceeding £4,189 per month, the NI rate is 2%.

“In terms of NHS salary, the net pay, which refers to the take-home pay after deductions, constitutes 54% of the total salary. This indicates that for every £1 earned, approximately 54 pence is retained while around 46 pence is deducted.”

If an individual within this salary bracket were to be promoted or move up from the position of Nursing Director (highest paid) on the Very Senior Manager pay point to that of Strategy and Planning Director (highest paid) on the Very Senior Manager pay point, they would experience an additional monthly income of £379.79 after all necessary deductions have been made.

This increase in earnings amounts to a total of £833.33 in additional income over the course of a month, taking into account the various deductions applicable to their salary.

Strategy and Planning Director (Highest Paid) – Very Senior Manager Pay Point

(£185,000 per annum)

Starting from 1st April 2023, in line with the 5% NHS pay rise provided, the annual salary for an individual serving as a Strategy and Planning Director (highest paid) on the Very Senior Manager pay point will amount to £185,000. This translates to a monthly income of £15,416.67 before any necessary deductions are made.

Upon receiving this salary, individuals in this NHS pay category will be subject to deductions including £601.47 per month for National Insurance contributions, £2081.25 per month for NHS Pension contributions, and £4432.19 per month for income tax. Consequently, their net take-home pay will amount to £8,301.76 per month.

The calculation of these figures is based on the prevailing tax and pension rates applicable within the NHS system. For individuals earning above £72,031 annually, a pension rate of 13.5% is implemented.

Regarding income tax, a progressive tax system is in place. Earnings falling between £12,570 and £50,270 per year are subject to a 20% tax rate. Income within the range of £50,270 to £125,140 per year is taxed at a rate of 40%. Any earnings exceeding £125,140 per year are subject to the highest tax rate of 45%.

National Insurance contributions are determined based on the income received. A rate of 12% applies to earnings ranging from £1,048.01 to £4,189 per month. For earnings surpassing £4,189 per month, a reduced rate of 2% is applied.

“When considering the net pay received by individuals in the NHS, it is observed that it accounts for 54% of the total salary. In other words, for every £1 earned, approximately 54 pence is retained as take-home pay, while around 46 pence is deducted for various purposes such as taxes, pension contributions, and national insurance.”

In the scenario where an individual within this pay band is promoted from the position of a Strategy and Planning Director (highest paid) on the Very Senior Manager pay point to the role of a Director of Finance (highest paid) on the same pay point, they would experience an increase in monthly earnings.

Specifically, after accounting for all deductions, this promotion would result in an additional £379.79 per month, contributing to a total increase of £833.33 in their overall monthly income.

Director of Finance (Highest Paid) – Very Senior Manager Pay Point

(£195,000 per annum)

Effective from 1st April 2023, in line with the 5% NHS pay rise, the annual salary for a Director of Finance (highest paid) on the Very Senior Manager pay point will be £195,000. This translates to a monthly income of £16,250.00 before any deductions are made.

Upon considering the necessary contributions and taxes, an individual in this NHS pay position can expect to pay £618.14 per month for National Insurance, £2,193.75 per month towards NHS Pension contributions, and £4,756.56 per month for income tax. Consequently, their net take-home pay would amount to £8,681.55 per month.

The pension rate of 13.5% is applicable to individuals whose earnings exceed £72,031 per year. In terms of income tax, a rate of 20% is imposed on earnings falling within the range of £12,570 to £50,270 per year. For earnings between £50,270 and £125,140 per year, the tax rate increases to 40%.

Any earnings surpassing £125,140 per year are subject to a tax rate of 45%. Regarding National Insurance (NI), a rate of 12% is applicable to earnings ranging from £1,048.01 to £4,189 per month, while earnings above £4,189 per month incur a 2% NI rate.

“In relation to the total salary, the NHS net pay, which refers to the take-home pay, amounts to 53%. This indicates that for every £1 earned, approximately 53 pence is retained, while around 47 pence is deducted.”

If an individual in this salary range were to be promoted or advance from the position of Director of Finance (highest paid) on the Very Senior Manager pay point to the role of Chief Operating Officer (highest paid) on the Very Senior Manager pay point, they would experience a monthly increase of £379.79 in their earnings after all deductions have been made, resulting in a total increase of £833.33.

Chief Operating Officer (Highest Paid) – Very Senior Manager Pay Point

(£205,000 per annum)

Effective from 1st April 2023, with the implementation of the 5% NHS pay rise, the annual salary for a Chief Operating Officer (highest paid) on the Very Senior Manager pay point will amount to £205,000. Before any deductions are made, this equates to a monthly income of £17,083.33. It is important to note that individuals in this NHS pay category will be subject to various deductions.

Specifically, they will contribute £634.81 per month towards National Insurance, £2306.25 per month towards NHS Pension, and £5080.94 per month towards Income Tax. After these deductions, the net (take-home) pay for individuals in this position will amount to £9,061.34 per month.

The calculation of deductions is based on specific rates and thresholds set by the government. For individuals earning above £72,031 a year, the pension contribution rate stands at 13.5%. In terms of Income Tax, there are different tax brackets. Earnings between £12,570 and £50,270 a year are subject to a 20% tax rate, while earnings between £50,270 and £125,140 a year are taxed at a rate of 40%. Any earnings exceeding £125,140 a year are subject to a 45% tax rate.

Regarding National Insurance (NI), the rates differ based on income levels. For earnings between £1,048.01 and £4,189 per month, the NI rate is set at 12%. Any earnings above £4,189 per month are subject to a 2% NI rate.

“When it comes to NHS net pay, which refers to the amount received as take-home pay, it constitutes 53% of the entire salary. In other words, for every £1 earned, 53 pence is retained as net pay, while 47 pence is deducted.”

In the scenario where an individual within this band is promoted or moves up from the role of Chief Operating Officer, which is the highest paid position on the Very Senior Manager pay point, to the position of Deputy Chief Executive Officer, they would experience an increase in their monthly earnings. Specifically, after considering all deductions, they would earn an additional £189.90 per month, resulting in a total increase of £416.67.

Deputy Chief Executive Officer (Highest Paid) – Very Senior Manager Pay Point

(£210,000 per annum)

Effective from 1st April 2023, with the implementation of the 5% NHS pay rise, the annual salary for an individual serving as the Deputy Chief Executive Officer, the highest paid position on the Very Senior Manager pay point, will amount to £210,000. Prior to any deductions, this equates to a monthly income of £17,500.00.

In terms of deductions, a person occupying this NHS pay point will be responsible for monthly contributions, including £643.14 towards National Insurance, £2362.50 towards NHS Pension contributions, and £5243.12 towards Income Tax. Consequently, their net or take-home pay will amount to £9,251.24 on a monthly basis.

The calculations mentioned above are based on the prevailing income tax, national insurance, and pension rates in the United Kingdom. Individuals with earnings exceeding £72,031 per year are subject to a pension rate of 13.5%. Income tax is levied at different rates depending on the earnings bracket. A 20% tax rate applies to earnings ranging from £12,570 to £50,270 per year, while a 40% tax rate is applicable to earnings between £50,270 and £125,140 per year. Any earnings surpassing £125,140 per year are subject to a higher tax rate of 45%.

Furthermore, national insurance contributions are made at a rate of 12% on earnings falling between £1,048.01 and £4,189 per month. For earnings surpassing £4,189 per month, a 2% national insurance rate is applied. These rates are essential in calculating the deductions from the gross salary to arrive at the net or take-home pay.

“When considering the NHS net pay, which represents the take-home pay, it accounts for approximately 53% of the entire salary. In other words, for every £1 earned, around 53 pence is retained as net pay, while approximately 47 pence is deducted for various contributions and taxes.”

In the event of a promotion or advancement from the position of Deputy Chief Executive Officer (highest paid) on the Very Senior Manager pay point to the role of Medical Director (highest paid) on the Very Senior Manager pay point, an individual would experience a significant increase in earnings. Specifically, they would earn an additional £1139.38 per month after accounting for all deductions, resulting in a total increment of £2500.00 overall.

Medical Director (Highest Paid) – Very Senior Manager Pay Point

(£240,000 per annum)

Effective from 1st April 2023, with the implementation of the 5% NHS pay rise, the annual salary for a Medical Director (highest paid) on the Very Senior Manager pay point will amount to £240,000. Prior to any deductions, this translates to a monthly income of £20,000.00.

Individuals occupying this NHS pay point will be subject to various deductions. Specifically, they will contribute £693.14 per month towards National Insurance, £2700.00 per month towards NHS Pension, and £6216.25 per month towards income tax. Consequently, their net (take-home) pay will amount to £10,390.61 per month.

The calculation of deductions is based on a pension rate of 13.5%, which applies to earnings exceeding £72,031 per year. The Income Tax rate varies according to income brackets. Specifically, there is a 20% tax rate on earnings ranging from £12,570 to £50,270 per year, a 40% tax rate on earnings between £50,270 and £125,140 per year, and a 45% tax rate on any earnings exceeding £125,140 per year.

Additionally, the National Insurance (NI) rate is set at 12% for earnings falling between £1,048.01 and £4,189 per month, while earnings surpassing £4,189 per month are subject to a 2% NI rate.

“In relation to the total salary, the net pay received by NHS employees (take-home pay) accounts for 52%. This indicates that, on average, for every £1 earned, 52 pence is retained as net pay, while 48 pence is deducted for various contributions and deductions.”

If an individual within this salary band were to be promoted from the position of Medical Director (highest paid) on the Very Senior Manager pay point to the role of Chief Executive (highest paid) on the Very Senior Manager pay point, they would experience a significant increase in their monthly earnings.

Specifically, their additional income would amount to £1519.17 per month after considering all applicable deductions, resulting in a total increase of £3333.33 in their annual earnings.

Chief Executive (Highest Paid) – Very Senior Manager Pay Point

(£280,000 per annum)

Effective from the 1st of April 2023, as a result of the 5% NHS pay rise, the annual salary for a Chief Executive (the highest paid position) on the Very Senior Manager pay point will be £280,000. This translates to a monthly pre-tax income of £23,333.33. Individuals in this NHS pay category are subject to various deductions, including National Insurance, NHS Pension contributions, and income tax.

Based on the specified salary, a Chief Executive will contribute £759.81 per month towards National Insurance. Additionally, their NHS Pension contributions will amount to £3,150.00 per month. In terms of income tax, they will be liable for £7,513.75 per month. After accounting for these deductions, their net (take-home) pay will amount to £11,909.78 per month.

The pension rate of 13.5% for individuals earning above £72,031 per year forms the basis for their pension contributions. This rate ensures that a portion of their earnings is allocated towards their pension fund, providing them with financial security in the future.

Regarding income tax, different tax rates are applicable based on specific income brackets. Earnings ranging from £12,570 to £50,270 per year are subject to a 20% tax rate. In the income bracket of £50,270 to £125,140 per year, a higher tax rate of 40% applies. Any earnings exceeding £125,140 per year attract the highest tax rate of 45%. These progressive tax brackets ensure that individuals contribute a proportionate amount of tax based on their income
level.

National Insurance (NI) contributions are determined by a similar tiered structure. Earnings falling between £1,048.01 and £4,189 per month are subject to a 12% NI rate. For earnings surpassing £4,189 per month, the NI rate decreases to 2%. These contributions fund various social security programs and entitlements.

“When considering NHS net pay, which refers to the take-home pay, it accounts for approximately 51% of the total salary earned. In other words, for every £1 earned, approximately 51 pence is retained as net pay, while around 49 pence is deducted for various contributions and taxes.”

Important Note

Tax is determined after deducting Pension contributions from the earnings. This implies that an
individual’s income, after accounting for pension contributions, may fall below the thresholds for
the 20%, 40%, or 45% tax brackets.