How National Insurance and NHS Pension Affect Your 2025/26 Payslip
Whether you’re a Band 6 nurse or a Band 2 healthcare assistant, understanding these deductions is key to managing your money. This guide explains how NI and NHS Pension work, uses a real Band 6 (England, 2025/26) example, and gives practical tips to make sense of your payslip.
Note: This article uses 2025/26 tax and NI rules for England, and Agenda for Change pay scales from 1 April 2025. Scotland, Wales and Northern Ireland have some differences in tax and/or pay.
Ready to see your own net pay? Try our NHS Tax & National Insurance Calculator (2025/26) for a personalised breakdown!
Why Deductions Matter for NHS Workers
Your payslip isn’t just about your gross salary – it’s about what actually lands in your bank account.
For 2025/26:
- NHS staff under Agenda for Change in England have received a 3.6% pay rise, backdated to 1 April 2025.
- For example, a Band 5 nurse (entry) now earns £31,049 per year (before HCAS and enhancements).
But after Income Tax, National Insurance, NHS Pension contributions, and possibly student loan repayments, your take-home pay is much lower.
Knowing how these deductions work helps you plan realistically for rent, bills and that well-deserved holiday. With inflation projected to hover around the 2% Bank of England target, keeping track of your real net pay matters more than ever.
Understanding National Insurance
What Is National Insurance?
National Insurance (NI) is a system of contributions paid by workers and employers. It helps fund benefits like the State Pension, certain sickness and maternity payments, and parts of the UK welfare system.
For most NHS employees, NI is taken automatically through PAYE. You never see it in your bank account – only on your payslip.
2025/26 NI Rates (Employees, England)
Based on HMRC guidance for Class 1 employee NI:
- 0% on earnings below £12,570
- 8% on £12,570 to £50,270
- 2% on earnings above £50,270
How It’s Calculated
Example: Band 6 nurse (entry), 2025/26
- Annual salary: £38,682
- NI-able earnings: £38,682 − £12,570 = £26,112
- All taxed at 8%
- Annual NI: £26,112 × 8% = £2,089
- Monthly NI: ~£174
Payroll calculates NI using monthly thresholds, so real payslips vary slightly.
Why NI Matters
NI reduces your take-home pay, but it also builds entitlement to key benefits.
The full new State Pension for 2025/26 is about £11,973 per year, available to those with enough qualifying NI years.
Understanding the NHS Pension
What Is the NHS Pension?
The NHS Pension (2015 Scheme) is a defined benefit pension. Your retirement income is based on your earnings and service length—not the stock market.
- Your contributions come directly from your salary.
- It is one of the most generous public sector schemes.
- Your employer contributes around 23.7% of your pensionable pay.
You can estimate your retirement benefits using our dedicated tool:
NHS Pension Calculator (2025/26)
2025/26 Member Contribution Rates (England)
- Up to £13,259 – 5.2%
- £13,260 – £27,797 – 6.5%
- £27,798 – £33,868 – 8.3%
- £33,869 – £50,845 – 9.8%
- £50,846 – £65,190 – 10.7%
- £65,191+ – 12.5%
Contribution tier thresholds rise annually so normal AfC pay increases don’t push staff into higher pension bands.
How It’s Calculated (Band 6 Example)
Band 6 salary: £38,682 → 9.8% tier
- Annual contribution: £3,791
- Monthly contribution: ~£316
Because pension contributions come off before Income Tax, they reduce your taxable income, lowering your tax bill.
Why It Matters
NHS Pension contributions reduce your take-home pay today but build a guaranteed, inflation-linked income for your future.
A Band 6 nurse with ~30 years in the 2015 scheme could expect a retirement income in the tens of thousands per year (plus State Pension), depending on service length and retirement age.
For precise projections, use the official NHS Pension modeller or our NHS Pension Calculator.
Real-World Example: PaySlip & Deductions
| Pay Band | Agenda for Change Band 6 (Entry) |
| Annual Salary | £38,682 |
| Location | England (standard tax and NI rules) |
| Tax Code | Standard code (e.g. 1257L), no adjustments |
| High-Cost Area Supplement (HCAS) | None (no London weighting or HCAS) |
| Pension Scheme | NHS Pension – 2015 Scheme |
| Member Contribution Tier | 9.8% (pensionable pay between £33,869 and £50,845) |
| Student Loan | Plan 2 only, no Postgraduate Loan |
| Other Deductions | None (no union subs, car parking, salary sacrifice, etc.) |
These assumptions are for illustration only. Actual payslips may differ due to tax codes, local allowances, enhancements and individual circumstances.
| Component | Calculation | Amount (£) |
|---|---|---|
| Gross Salary | – | 38,682 |
| NHS Pension (9.8%) | 38,682 × 0.098 | 3,791 |
| Taxable Income for Income Tax | 38,682 − 3,791 − 12,570 | 22,321 |
| Income Tax (20%) | 22,321 × 0.20 | 4,464 |
| National Insurance | 8% on (38,682 − 12,570 = 26,112) | 2,089 |
| Student Loan (Plan 2) | 9% of (38,682 − 28,470 = 10,212) | 919 |
| Total Deductions | 3,791 + 4,464 + 2,089 + 919 | 11,263 |
| Net Pay (Annual) | 38,682 − 11,263 | 27,419 |
Income Tax, National Insurance and student loan figures are rounded annual estimates based on 2025/26 rules for England. Actual amounts are calculated per pay period by payroll, so they may differ slightly.
| Component | Amount (£/month) |
|---|---|
| Gross Monthly Pay | 3,223.50 |
| Estimated Net Monthly Pay | ≈ 2,285 |
Monthly values are annual figures divided by 12 and rounded. Real payslips may differ due to exact pay dates, enhancements, HCAS, tax code changes and other deductions.
NHS Band 6 Deductions: National Insurance and NHS Pension
NHS Band 6 (Entry) Payslip Breakdown – 2025/26
How to Check Your Own Payslip
Deductions vary by pay band, pay point (experience), contracted hours, location, and personal circumstances (such as student loans, tax code, childcare vouchers, or salary sacrifice schemes). To get a personalised and accurate breakdown:
Use our NHS Pay Calculator for 2025/26
Select your pay band (2–9) and experience level (e.g. Entry: 0–1 year).
Then add options such as NHS Pension status, student loan plan, and contracted hours to instantly see:
- Gross pay
- Income Tax and National Insurance deductions
- NHS Pension contributions
- Estimated monthly and annual net pay
Practical Tips for NHS Workers
Review Your Payslip
Check NI, pension contributions and student loan deductions each month. Payroll errors are rare but do happen.
Budget Smartly
Using the Band 6 example (~£2,285 net per month), you might aim for:
- 50% on essentials (rent, utilities, food)
- 30% on wants
- 20% on savings or debt repayments
(Based on the 50/30/20 rule used by MoneyHelper and other budgeting tools.)
Leverage Tax Benefits
NHS Pension contributions are taken before Income Tax, which reduces your taxable income and overall tax bill.
Plan for Retirement
Use the NHS Pension calculator or modeller from NHS Business Services Authority, along with your State Pension forecast, to estimate your retirement income.
Stay Informed
Watch for updates to:
- NHS Pay Bands and awards
- Pension contribution thresholds
- National Insurance and student loan rules
Why These Deductions Are (Usually) Worth It
Yes, NI and NHS Pension contributions reduce your monthly payslip, but they’re also long-term protections:
National Insurance
Builds your State Pension entitlement (up to about £11,973/year in 2025/26 for the full new State Pension).
NHS Pension
Offers a guaranteed, inflation-linked income in retirement, with an NHS employer contribution of around 23.7% of your pensionable pay, far higher than most private sector schemes.
By understanding these deductions, you can read your payslip with confidence, plan your budget realistically, and make informed decisions about your NHS career and retirement.
Disclaimer: nhspayband.co.uk is an independent tool, not affiliated with the NHS. Figures are estimates based on NHS England’s Agenda for Change and HMRC data for 2025/26. Always check your payslip for exact deductions.
