Pay Rise Calculator
Calculate how much more you'll take home after a pay rise, factoring in UK Income Tax and National Insurance.
What this calculator does
This calculator shows what a UK pay rise is worth once income tax and National Insurance have taken their share. Enter your current pay and either a percentage increase or a cash amount, and it returns the new gross, the net annual gain, and a comparison of current against raised pay split into net pay, income tax, and National Insurance.
The gap between the headline and the reality comes from the fact that a rise sits on top of your existing income and is taxed at your marginal rate. Because National Insurance and income tax move in opposite directions at the upper earnings limit, the marginal rate does not rise smoothly, and the comparison chart is what makes that step visible.
When to use it
Run it before a salary conversation so that you are asking for the right number. If you need 300 pounds more a month and you are a higher-rate taxpayer, that is a rise of roughly 6,200 pounds gross, not 3,600.
It matters most around thresholds. If a rise would take you across the point where Child Benefit begins to be clawed back, or across 100,000 pounds where the personal allowance starts to taper, the calculator shows how thin the gain becomes and how much of it could be redirected into pension instead. Sometimes the correct decision is to take the rise as employer pension contribution and keep adjusted net income below the line.
Understanding the inputs
Current pay accepts an annual salary or an hourly rate with hours and weeks per year. Use gross figures, before pension and any other deduction.
Expressing the rise as a percentage or a cash amount gives identical arithmetic but changes how it reads in a negotiation; asking for a specific figure is generally more effective than asking for a percentage. Where your current salary sits relative to 50,270 pounds and 100,000 pounds determines almost everything about the result, so if you are close to either, run the rise in two parts to see where the boundary bites. All thresholds are set each April.
A worked example
Take someone moving from 48,000 to 54,000 pounds, a rise of 6,000 pounds, using 2026/27 thresholds. The higher-rate threshold at 50,270 pounds splits the increase in two. The first 2,270 pounds is taxed at 20 percent with 8 percent National Insurance, keeping 72 percent, or about 1,634 pounds.
The remaining 3,730 pounds is taxed at 40 percent with National Insurance dropping to 2 percent, keeping 58 percent, or about 2,163 pounds. Total net gain is roughly 3,797 pounds, about 316 pounds a month, from a 6,000 pound rise. That is 63 percent retained. Add a Plan 2 student loan taking 9 percent and the retained share falls to around 54 percent, or roughly 271 pounds a month.
Limitations and assumptions
This is an estimate, not tax advice, and HMRC is the authority. It applies English, Welsh, and Northern Irish income tax bands; Scottish taxpayers have additional bands and a lower higher-rate threshold, so their marginal rates on a rise differ meaningfully and are not modelled here.
It does not model the personal allowance taper above 100,000 pounds, the High Income Child Benefit Charge, student loan repayments, salary sacrifice, or the effect of a rise on tax credits and Universal Credit tapers, all of which can matter far more than the band arithmetic. Thresholds have been frozen in recent years rather than uprated, which pushes more of each rise into higher bands over time. Check GOV.UK for the current tax year, and speak to an accountant before restructuring pay around a threshold.
Common Questions
- How much of a pay rise do I actually keep?
- It depends entirely on which band the increase falls in. A basic rate taxpayer keeps about 72 pence in the pound after 20 percent income tax and 8 percent National Insurance. A higher rate taxpayer keeps around 58 pence after 40 percent tax and 2 percent NI. A student loan repayment removes another 9 percent.
- What happens to a rise that crosses the higher-rate threshold?
- Only the portion above the threshold is taxed at 40 percent; the rest stays at 20. Confusingly, National Insurance moves the opposite way, dropping from 8 percent to 2 percent above the upper earnings limit, which sits at the same point. The net effect is a jump in the combined marginal rate from 28 percent to 42 percent.
- Why do I keep so little of a rise between 100,000 and 125,140 pounds?
- Because the personal allowance is withdrawn at one pound for every two pounds of income above 100,000 pounds. You pay 40 percent on the rise itself and 40 percent on the allowance you lose, an effective 60 percent, plus 2 percent National Insurance. On a 6,000 pound rise in that band you keep roughly 2,280 pounds.
- Can a pay rise trigger the High Income Child Benefit Charge?
- Yes, and it catches people out. Once the higher earner's adjusted net income passes the threshold, Child Benefit is clawed back through a tax charge that scales up until the benefit is fully cancelled. Increasing pension contributions reduces adjusted net income and can eliminate the charge entirely, so it is worth modelling both ways.
- Is a 3 percent rise good?
- Only relative to inflation. A 3 percent rise when CPI is running at 4 percent leaves you about 1 percent worse off in real terms. Compare your rise against CPI over the same period rather than against zero, and remember that frozen tax thresholds mean rises quietly push more income into higher bands each year.
- Should I take a rise as salary or pension?
- Above the higher-rate threshold the case for pension is strong, since salary sacrifice avoids 40 percent income tax and both employee and employer National Insurance, and many employers pass their saving on. Below it the trade-off is closer. The deciding factor is usually whether you need the cash now or can leave it until pension access age.
- Why did my first payslip after the rise look wrong?
- PAYE is cumulative, so the month a rise takes effect recalculates your year-to-date position and may include back pay or a correction. If the rise was backdated, the lump sum is taxed in that period and can push the month's figures oddly high. It settles across the remaining months of the tax year.
- Does a rise affect my student loan repayment?
- Yes, immediately. Repayment is 9 percent of everything above your plan's threshold, deducted through payroll with no bracket subtlety, and a postgraduate loan adds 6 percent on top of that. For someone with both, the marginal rate on a higher-rate rise reaches 57 percent once income tax, NI, and both loans are combined.
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