Net-to-Gross Calculator

For the 2026/27 tax year, the personal allowance remains at £12,570, meaning the first £12,570 of gross salary is tax-free. Any amount above this threshold is subject to income tax at the basic rate of 20% until reaching the higher rate band. This allowance directly reduces the gross figure needed to achieve a specific net pay target.

Dividend tax rates for 2026/27 are 10.75% for basic rate, 35.75% for higher rate, and 39.35% for additional rate taxpayers. The tax-free dividend allowance is set at £500 per year, below which no tax is due. Calculations must account for this allowance before applying the relevant marginal tax rates to your dividend income.

Employers pay Class 1 National Insurance at a rate of 15% on earnings above the £5,000 annual threshold for the 2026/27 tax year. This cost is separate from employee deductions and is often factored into total employment costs during salary negotiations. Understanding this helps in determining the true gross cost of a role versus the net take-home pay.

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) becomes mandatory for individuals with gross income exceeding £50,000 from April 2026. This requires maintaining digital records and submitting quarterly updates to HMRC. The threshold is expected to lower to £30,000 in the following tax year, expanding the scope of affected taxpayers.

The s455 tax rate is 35.75% and applies to loans made by a close company to a participator that are not repaid within nine months of the accounting period end. This charge is refundable to the company once the loan is repaid, but it creates a significant cash flow impact. Accurate net-to-gross calculations for directors must consider potential s455 liabilities on outstanding loans.