£40,000 Internship Salary After Tax 2025-26
Take-home pay with and without Plan 2 student loan repayments.
£40,000 internship — without vs with Plan 2 student loan
| Item | Without student loan | With Plan 2 |
|---|---|---|
| Gross salary | £40,000 | £40,000 |
| Income Tax | −£5,486 | −£5,486 |
| National Insurance | −£2,194 | −£2,194 |
| Student Loan (Plan 2) | — | −£1,143 |
| Annual take-home | £32,320 | £31,177 |
| Monthly take-home | £2,693 | £2,598 |
Plan 2 student loan during your internship
Student loan repayments are collected automatically through PAYE — they apply whether you are on a permanent contract, internship, or placement. If your internship is shorter than a full year, your actual repayment will be proportionally lower.
What does a £40,000 internship salary mean in practice?
On a £40,000 internship salary, you take home £32,320/year (£2,693/month, £622/week, £124/day). Your net hourly rate — based on a standard 37.5-hour week — is approximately £16.57. Your earnings are 14% above the UK median salary of £35,000 and sit above the annualised National Living Wage (£12.21/hr × 35hrs = ~£22,369/year).
Because your salary exceeds the Plan 2 repayment threshold of £27,295, student loan repayments of £95/month (£1,143/year) are automatically deducted through PAYE. This brings your take-home down to £31,177/year. Your earnings fall in the Basic Rate (20%) band — for every £1 you earn you keep roughly 80.8p after tax and NI (before student loan).
Interns on a PAYE contract have the same tax treatment as permanent employees — Income Tax, National Insurance, and student loan repayments all apply at the same rates. If your internship is shorter than 12 months, HMRC may have over-collected tax due to the standard weekly/monthly PAYE spreading; you can claim a refund at the end of the tax year using a P800 or self-assessment.
Personalised insights — £40,000 internship
On £40,000 you keep 81p of every £1 before student loan and 78p once Plan 2 deductions kick in (9% on the excess above £27,295). That works out at £30 of IT+NI every working day; your gross sits 1.68× the annualised National Living Wage (£23,810). Benchmarked against the typical UK graduate starting salary of £30,000 (net ~£25,120), you are £10,000 above that baseline. A London-weighted internship at ~15% uplift (£46,000 gross) would add £4,320/year to your net — before factoring in London rent typically £400-£600/month higher than regional cities. A £5,000 permanent raise post-internship would add £3,600 net (marginal rate 28%). You are using 100% of your £12,570 Personal Allowance, and saving 20% of take-home (£539/month) fills a full £20,000 ISA in 38 months.
Frequently asked questions
Do interns pay Income Tax on a £40,000 salary?
Yes. At £40,000/year, your earnings exceed the £12,570 Personal Allowance. You pay Income Tax of £5,486 at 20% on earnings above £12,570. Tax is deducted automatically through PAYE by your employer.
Do interns pay National Insurance?
Yes. National Insurance applies to all employees on earnings above £12,570/year (£242/week), regardless of whether you are on an internship, a permanent contract, or a temporary placement. On £40,000/year, you pay £2,194 in NI at 8%.
Do I repay student loan during an internship on £40,000?
Yes. Your salary of £40,000 exceeds the Plan 2 threshold of £27,295, so repayments of £1,143/year (£95/month) are automatically deducted through PAYE. This reduces your take-home from £32,320 to £31,177/year.
What is the take-home for a £40,000 internship after tax?
On a £40,000 internship salary, you take home £32,320/year (£2,693/month, £622/week) without student loan. After Income Tax of £5,486 and NI of £2,194, your effective tax rate is 19.2%.
What is the monthly take-home on a £40,000 internship?
On a £40,000 annual internship salary, your monthly take-home without student loan is £2,693. With Plan 2 loan deductions of £95/month, your take-home reduces to £2,598/month.
Does student loan repayment affect my internship take-home on £40,000?
Yes. On a £40,000 internship salary, Plan 2 student loan repayments of £95/month (£1,143/year) are deducted automatically through PAYE. This reduces your monthly take-home from £2,693 to £2,598. The repayment rate is 9% on earnings above £27,295.