£25,000 Salary Breakdown (2025/2026)

Overview of a £25,000 Salary

Earning £25,000 places you firmly in the standard Basic Rate tax band (20%). This is a common starting salary for graduates or junior roles across the UK.

Income Tax Calculation

With the standard tax code 1257L, your Tax-Free Allowance is £12,570. This means you only pay tax on the remaining £12,430.

  • Gross Pay: £25,000
  • Taxable Amount: £12,430
  • Income Tax (20%): approx. £2,486 per year.

Student Loan Repayments on £25k

Depending on your loan type, you might start seeing deductions at this salary level:

  • Plan 1 (Threshold ~£26,065): You pay £0.
  • Plan 2 (Threshold ~£28,470): You pay £0.
  • Postgraduate Loan (Threshold £21,000): You earn £4,000 above the threshold. You will pay 6% of this amount, which is approx £240 per year (or £20/month).

National Insurance (NI)

Class 1 National Insurance is charged at 8% on earnings between £12,570 and £50,270. Since your entire taxable income (£12,430) falls into this band, you will pay roughly £994 in National Insurance for the year.