£20,000 Salary Breakdown (2025/2026)
Is £20,000 a good salary in the UK?
A salary of £20,000 is slightly below the UK median average, but significantly above the minimum wage for younger age groups. For the 2025/2026 tax year, keeping your tax code as 1257L means you are in the Basic Rate tax band.
How is a £20k Salary Taxed?
On a £20,000 annual income, your first £12,570 is tax-free (Personal Allowance). You only pay Income Tax on the remaining £7,430.
Quick Estimate:
- Gross Income: £20,000
- Taxable Income: £7,430
- Tax Rate: 20% on the taxable amount.
- National Insurance: You pay 8% on earnings between £12,570 and £20,000.
Do I pay Student Loan on £20,000?
It depends on your plan. For the 2025/26 year:
- Plan 1: Threshold is approx £26,065. You pay £0.
- Plan 2: Threshold is approx £28,470. You pay £0.
- Postgraduate: Threshold is £21,000. You pay £0.
With a £20k salary, you likely won't have any student loan deductions unless you have arrears or a different plan type.
Where does my money go?
| Fee | Rate | Impact |
|---|---|---|
| Income Tax | 20% | Applied to £7,430 of your income. |
| National Insurance | 8% | Applied to £7,430 of your income. |
| Personal Allowance | 0% | First £12,570 is yours to keep. |