Pay Rise Calculator

The short answer

• Basic-rate taxpayers keep 72p of every £1 of a pay rise: 20% goes in Income Tax and 8% in National Insurance.
• Higher-rate taxpayers keep 58p; inside the £100,000 trap, only 38p.
• A student loan takes another 9p in every pound above its threshold.
• With inflation at 3.1%, a 3.1% rise on £28,000 still leaves you about £106 a year worse off in real terms, because tax takes more of the rise.

Your marginal rate decides what you keep

What matters for a pay rise is not your average tax rate but your marginal rate: the share of the next pound you earn that goes in deductions. Someone on £30,000 pays about 16% of their whole salary in Income Tax and National Insurance, but 28% of any rise. The calculator works out your take-home before and after the rise with the full 2026/27 rules, so every threshold you cross is counted exactly, including a rise that straddles two bands.

How much you keep at each salary

Child Benefit, a student loan or Universal Credit can push these figures lower.

Worked examples

Crossing into the higher rate

Above £50,270, Income Tax rises from 20% to 40%, but National Insurance falls from 8% to 2%, so the combined rate rises from 28% to 42%. A rise that takes you over the line is taxed at both rates, which is why the £50,000 example keeps 60% rather than 72% or 58%. Higher-rate taxpayers also see their Personal Savings Allowance halve to £500, so interest on savings can cost more too.

The £100,000 trap

Between £100,000 and £125,140, you lose £1 of tax-free Personal Allowance for every £2 you earn, which adds 20% to the 40% rate. With 2% National Insurance, you keep only 38p in the pound. A 5% rise from £100,000 to £105,000 adds just £1,900 to your take-home. Parents in this band also lose 30 hours of funded childcare and Tax-Free Childcare, which can make a rise cost money overall. Salary sacrifice into a pension is the usual way to stay under £100,000.

Pay rises and Child Benefit

If you or your partner get Child Benefit and the higher earner’s income is between £60,000 and £80,000, 1% of the Child Benefit is taken back for every £200 of income over £60,000. With two children, a rise from £60,000 to £63,000 adds £1,740 of take-home, but £351 goes in the charge: you keep 46% of the rise. The calculator includes the charge when you enter your number of children. See the High Income Child Benefit Charge calculator.

Student loans

Above your plan’s threshold, student loan repayments take 9% of any rise (6% for postgraduate loans). A basic-rate taxpayer on Plan 2 keeps 63p in the pound rather than 72p: a £2,000 rise on £35,000 adds £1,260 a year. For many graduates the loan will be written off before it is repaid, so these repayments work like an extra tax rather than paying down a debt.

Scotland

Scottish taxpayers have six bands: 19%, 20%, 21%, 42%, 45% and 48%. On a rise from £35,000 to £37,000, in the 21% intermediate band, a Scottish taxpayer keeps £1,420 of the £2,000, compared with £1,440 elsewhere in the UK. The Scottish higher rate of 42% starts at £43,663, earlier than the UK’s £50,270, so Scottish rises in the £44,000 to £50,000 range keep only 50p in the pound.

Real pay: beating inflation

A rise only makes you better off if your take-home grows faster than prices. Because tax takes a bigger share of the rise than of your whole salary, you need a slightly bigger percentage rise than the inflation rate to stand still. With inflation at 3.1%, someone on £28,000 needs about £1,020 more, a 3.6% rise, just to keep their take-home in line with prices. The calculator shows the rise you need to beat inflation.

When the rise shows on your payslip

A rise usually starts in the next pay run after it is agreed. Backdated rises are often paid as a lump sum, which can be taxed at a higher rate in that month because PAYE treats it as if you were paid that much every month. Any overpaid tax is normally corrected over the rest of the tax year. A rise part-way through the year only counts for the months it is paid, so your first year’s gain is smaller than the full-year figure in the calculator.

Putting part of a rise into your pension

Paying more into a pension by salary sacrifice saves Income Tax and National Insurance on the amount you sacrifice. For a basic-rate taxpayer each £1 in the pension costs 72p of take-home; for a higher-rate taxpayer, 58p; inside the £100,000 trap, 38p. Raising your pension contribution at the same time as a pay rise means you never miss the money. See the salary sacrifice calculator.

Pay rises and benefits

On Universal Credit, each extra pound of take-home reduces your award by 55p once you are above any work allowance. A basic-rate taxpayer then keeps 72p × 45% = about 32p of each pound of rise. Help with childcare, prescriptions and council tax may change too. A rise is still worth having, but it is worth checking the whole picture with the UC taper calculator.

Asking for a pay rise

• Collect evidence: market rates for your job, your achievements and any new responsibilities.
• Use the take-home figure, not just the salary, to decide what rise you need.
• Ask for the rise to beat inflation as a minimum, so your pay does not fall in real terms.
• Consider the whole package: pension contributions, holiday, flexible working and training can be worth as much as salary.

Weighing up a promotion or new job

Use the reverse take-home calculator to work out the salary a new job would need to pay.

A £100,000 example

Why real pay matters

Over the long run, what matters is whether your pay buys more each year. When inflation was high in 2022 and 2023, many people received the largest cash pay rises in decades but were still worse off in real terms. Tracking your take-home after inflation, rather than your headline salary, gives a truer picture of whether your living standards are rising.

A rise part-way through the year

If your rise starts in, say, October, only half of it is paid in the 2026/27 tax year. The calculator compares full years, so your gain in the first tax year is about half the figure shown, and the full gain arrives the following year. PAYE spreads your Personal Allowance and bands across the year, so the tax on the higher pay in the second half is worked out correctly by the end of March as long as your tax code is right.

If you are self-employed

For sole traders, the same idea applies to extra profit: Income Tax at 20% or 40% plus Class 4 National Insurance at 6% or 2%. A basic-rate sole trader keeps 74p of each extra pound of profit, slightly more than an employee, because self-employed National Insurance is lower. See the sole trader tax calculator.

Looking at the whole package

A pay rise is not the only way to be better off. A higher employer pension contribution goes into your pension without any tax or National Insurance, so £1,000 more from your employer is worth more than £1,000 more salary. Extra holiday, flexible hours and a shorter commute all have real value too. When you compare offers, add them up.

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