Earning £12 Per Hour: 2025/2026 Salary Breakdown
Annual and Monthly Equivalent
If you are earning £12 per hour and working a standard 37.5-hour week, your total gross annual income is £23,400. On a monthly basis, this equates to a gross pay of £1,950. While this provides a steady foundation, it is important to calculate your net take-home pay after Income Tax and National Insurance to understand your true spending power in today's economy.
£12/hr vs the 2025 National Living Wage
It is crucial to note that for the 2025/2026 tax year, the National Living Wage is set at £12.21 per hour for workers aged 21 and over. If you are 21 or older and receiving £12 per hour, your pay may be below the legal minimum unless you fall into specific categories such as certain apprentices in their first year. This rate of £12/hr is more commonly seen for roles held by 18-20 year olds (where the minimum is lower) or in junior and entry-level positions where pay scales are tightly aligned with statutory minimums.
Tax and Deductions Breakdown
With an annual salary of £23,400, you are a Basic Rate taxpayer. After your £12,570 Personal Allowance, you will pay 20% Income Tax on the remaining £10,830. Additionally, National Insurance contributions at 8% will be deducted from your earnings above the Primary Threshold. For most workers on this rate, the monthly take-home pay will be approximately £1,691, though this will decrease if you have a student loan (Plan 1 or 2) or if you choose to contribute to a workplace pension.
Budgeting on £12 per hour
Living on £12 per hour requires careful financial planning, especially given recent inflationary pressures on food and energy. In many parts of the UK, this wage allows for independent living in shared accommodation, but may feel stretched in higher-cost cities. We recommend using our 'Advanced Settings' to see how a 5% pension contribution impacts your take-home pay; while it reduces your current cash, it is a vital step for long-term financial security.