- A £25,000 salary gives a take-home of about £21,520 a year (£1,793 a month).
- That is £2,486 income tax and £994 National Insurance, so you keep about 86%.
- The same £25,000 as a sole trader profit nets roughly £21,768 (slightly more, lower NI).
- As £25,000 of company profit through a limited company, take-home is around £20,962.
- Pension contributions, a non-standard tax code or a student loan all change the net figure.
Calculator
Your £25,000 salary breakdown
For an employee on £25,000 in 2025/26 (England, Wales or Northern Ireland, standard tax code):
- Gross salary: £25,000
- Personal allowance: £12,570 (tax-free)
- Income tax: £2,486
- National Insurance: £994
- Take-home: £21,520 a year, £1,793 a month
Income tax is charged at 20% above the £12,570 personal allowance, then 40% above £50,270. National Insurance is 8% between £12,570 and £50,270, then 2% above. The calculator updates instantly if your figure differs.
£25,000: employee vs sole trader vs limited company
The same £25,000 produces a different take-home depending on how you earn it:
- Employee salary: about £21,520. Income tax plus 8%/2% employee National Insurance.
- Sole trader profit: about £21,768. Same income tax, but Class 4 NI is 6%/2% rather than 8%/2%, so you keep a little more.
- Limited company profit: about £20,962. A £12,570 salary plus dividends after corporation tax, the route most owner-managed directors use.
The limited-company figure assumes the profit is fully extracted in the year and no Employment Allowance. Leaving profit in the company, or making a pension contribution, changes it. Our optimal director salary guide works through the choices.
How to keep more of your £25,000
- Pension contributions come off before tax, so they reduce income tax (and for higher earners, can restore some personal allowance).
- Salary sacrifice for pension also cuts National Insurance, which a personal contribution does not.
- Sole traders should claim every allowable expense, covered in our allowances guide.
- Directors can tune the salary and dividend mix, see the dividend tax calculator.
Take Home models all of these against your real income, so you see your actual take-home rather than a salary-only estimate.