Pay rise calculator

Figures 2026/27 tax year Last checked 21 August 2026 Where these come from

A £5,000 rise on a £105,000 salary is worth £1,900 in hand — 38% of it. Between £100,000 and £125,140 the personal allowance is being withdrawn, so the marginal rate is 62% rather than the 40% the band would suggest.

Effective rate and marginal rate are different numbers

Your effective rate is what you pay across your whole salary. Your marginal rate is what the next pound costs. They answer different questions, and it is the marginal one that decides what a rise is worth — which is why a page like this exists at all.

The two can be a long way apart. Someone on £105,000 has an effective rate of 32.9% but a marginal rate of 62%, because the personal allowance is disappearing as they earn. The take-home pay calculator shows both for any salary.

What catches people out

• The share of a rise you keep is decided by your marginal rate, not your tax band. A basic rate taxpayer keeps 72p of each extra pound after 20% tax and 8% National Insurance; a higher rate one keeps 58p; someone with a student loan keeps 9p less again.
• Between £100,000 and £125,140 a rise is worth less than half of it. The personal allowance falls by £1 for every £2 earned, so an extra pound is taxed at an effective 60% before National Insurance — 62% with it, and 71% with a student loan. A £5,000 rise at £105,000 is worth about £1,450 in hand.
• A rise can cost more than it pays if it crosses the Child Benefit charge. Above £60,000 of adjusted net income the benefit is clawed back at 1% per £200, which for three children adds roughly 11 percentage points to your marginal rate on top of everything else.
• A bonus is taxed the same as salary over a year, but the month you get it may look worse than it is. PAYE assesses National Insurance within each pay period, so a large one-off payment attracts 8% on more of itself than an annual calculation suggests. Income tax usually evens out over the year; National Insurance does not.
• Salary sacrifice is the only reliable way to change the answer. Sacrificed pay never becomes income, so it avoids tax, National Insurance and the allowance taper together — which is why a rise into the taper is often worth more redirected than taken.

Questions

Why do I only keep half my pay rise?

Because the rise sits on top of everything you already earn, so it is taxed at your highest rate rather than your average one. Your effective rate across the whole salary might be 25%, while the marginal rate on the next pound is 42%.

The two numbers answer different questions, and it is the marginal one that decides what a rise is worth. This page shows both.

Is it possible to be worse off after a rise?

Not from income tax or National Insurance alone — no UK marginal rate on employment income exceeds 100%, so more gross always means more net. The engine behind this page is tested against exactly that across hundreds of salaries.

You can be worse off through things this calculator does not see: losing a means-tested benefit, crossing the childcare support thresholds, or a student loan starting. Those are cliff edges rather than rates.

Will my bonus really be taxed at 40%?

It is taxed at whatever your marginal rate is once the bonus is counted, which for many people means part at 20% and part at 40%. The often-repeated idea that bonuses have a special higher tax rate is not true — there is no separate bonus tax.

What is true is that a bonus paid in one month can look brutal on that payslip, because PAYE works out National Insurance for that period alone. Income tax generally corrects itself over the year.

Should I take the rise as pension instead?

This site will not tell you what to do with it — that is a decision about your age, your other savings and when you need the money. What it can tell you is what each option is worth: this page shows what the rise pays in hand, and the salary sacrifice calculator shows what the same amount costs if redirected into a pension.

Between £100,000 and £125,140 the two figures are unusually far apart, which is worth seeing before deciding.

What the same money is worth in a pension

Work out the next thing

• Statutory redundancy payWorked out year by year, because the rate depends on the age you were during each year of service rather than your age when the job ends.
• Child BenefitHow much is clawed back above £60,000, and the marginal rate — which is the one UK threshold that depends on how many children you have.
• Take-home payGross salary in, every deduction itemised out — income tax band by band, National Insurance, student loan, pension.