£45,000 Salary Breakdown (2025/2026)

£45,000: The Upper End of Basic Rate

A salary of £45,000 is well above the national average. Crucially, you are still below the £50,270 Higher Rate threshold. This means you currently pay 20% tax on earnings above your allowance, rather than jumping to 40%.

Your Tax Calculation

For the 2025/2026 tax year with a 1257L code:

  • Personal Allowance: £12,570 (Tax-free).
  • Taxable Income: £32,430 (£45,000 - £12,570).
  • Income Tax (20%): £6,486.
  • National Insurance (8%): £2,594 (calculated on earnings between £12,570 and £45,000).

Student Loan Repayments on £45k

If you have student loans, the deductions on a £45,000 salary are significant:

  • Plan 1: ~£1,700/year (approx. £142/month).
  • Plan 2: ~£1,490/year (approx. £124/month).
  • Postgraduate: ~£1,440/year (approx. £120/month).

Approaching the Higher Rate

You are only about £5,000 away from the Higher Rate tax band (40%). If you expect a bonus or pay rise soon, it is worth considering increasing your pension contributions (salary sacrifice) to keep your taxable income lower, which is highly tax-efficient.