How does moving to a four-day week affect my pay and take-home in the UK?

Full answer

Four-day week means different things, and the pay impact turns entirely on which model your employer uses. This affects employees considering reduced hours and employers designing the policy. Model one is the 100-80-100 four-day week: full pay (100%) for 80% of the hours, with productivity expected to hold. Here your gross salary, tax, National Insurance and take-home are all unchanged -- you simply work fewer hours for the same money. Model two is a compressed week: you work your full contracted hours but over four longer days. Again, pay and take-home are unchanged because total hours and salary stay the same; only the schedule shifts. Model three is genuine part-time at 0.8 of a full-time role, where gross pay drops to 80%. This is the only model that cuts your money, and the cut to take-home is less than 20% because the tax and NI system is progressive. The Personal Allowance of GBP 12,570 is tax-free regardless of hours, so a smaller share of your reduced salary is taxed at 20%, and you may drop below the GBP 50,270 higher-rate threshold, saving 40% tax and moving some earnings into the 2% NI band rather than 8%. Worked illustration of the mechanism: a GBP 50,000 salary cut to GBP 40,000 (0.8) loses GBP 10,000 gross, but because that top slice was taxed at 20% plus 8% NI (28% combined), the net loss is around GBP 7,200, so take-home falls by roughly 72% of the gross cut, not the full amount. Use the take-home pay or salary calculator with both figures to see your exact net under each option. A reduced salary can also affect pension contributions, student loan repayments (which only bite above your plan threshold) and statutory pay calculations, so model the whole picture before agreeing to fewer days.

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