Pay Rise Calculator
Your raise is worth
£300/month extra take-home
Gross Raise
£5,000
+16.7%
You Keep
72.0%
of the raise
Tax + NI on Raise
28.0%
marginal rate
Lost to Deductions
£1,400
total
Where Your £5,000 Raise Goes
| Before | After | Change | |
|---|---|---|---|
| Gross Salary | £30,000 | £35,000 | +£5,000 |
| Income Tax | £3,484 | £4,484 | +£1,000 |
| National Insurance | £1,394 | £1,794 | +£400 |
| Annual Take-Home | £25,121 | £28,721 | +£3,600 |
| Monthly Take-Home | £2,093 | £2,393 | +£300 |
| Marginal Tax Rate | 20.0% | 20.0% | — |
| Effective Tax Rate | 11.6% | 12.8% | +1.2% |
💡 Maximise your raise?
Adding your raise to your pension via Salary Sacrifice saves both Income Tax and National Insurance.
1. Current Salary: Enter your current gross annual salary (before tax).
2. Pay Rise: Enter your new salary, the raise amount in pounds, or the percentage increase — whichever is easiest.
3. Optional Settings: Add your pension contribution and student loan plan for a more accurate result.
4. Compare: Instantly see how much of your raise you actually keep after tax, NI, pension, and student loan.
Understanding Your Pay Rise After Tax
A pay rise is always good news — but the number your employer quotes is the gross increase. The amount that actually reaches your bank account depends on your marginal tax rate — the rate applied to the "next pound" of income.
Because your pay rise sits on top of your existing salary, it's taxed at whatever rate applies to that income level. If your current salary already uses up your Personal Allowance (£12,570) and Basic Rate band (up to £50,270), the entire raise could face 40% Income Tax plus 2% National Insurance.
UK Marginal Tax Rates at a Glance
| Income Band | Income Tax | NI | Combined | You Keep |
|---|---|---|---|---|
| £12,571 – £50,270 | 20% | 8% | 28% | 72p |
| £50,271 – £100,000 | 40% | 2% | 42% | 58p |
| £100,001 – £125,140 * | 40%+20% | 2% | 62% | 38p |
| £125,141+ | 45% | 2% | 47% | 53p |
* The "60% tax trap" — Personal Allowance is withdrawn at £1 per £2 earned above £100,000. Learn more
How to Make the Most of Your Pay Rise
Pension Salary Sacrifice
Redirect your raise into your pension via salary sacrifice to save both Income Tax and NI. A £5,000 raise at 42% marginal rate = £2,100 in tax saved — your pension gets the full £5,000.
Gift Aid Donations
If you donate to charity, Gift Aid extends your basic rate band. Higher rate taxpayers can claim back 20% of gross donations via Self Assessment, effectively reducing the tax rate on your raise.
Cycle to Work / EV Scheme
Salary sacrifice schemes for bikes or electric vehicles reduce your taxable income, similar to pension sacrifice. If you've been considering one, a pay rise is the perfect time.
ISA / Savings
Once you've optimised your tax position, direct the extra take-home into a Stocks & Shares ISA (£20,000 annual allowance) for tax-free growth on your investments.
Pay Rise vs Inflation: The Real Picture
Don't forget inflation. If your pay rise is 3% but inflation (CPI) is 4%, your real pay has actually fallen. After tax, the picture can be even worse — a 3% gross raise at a 42% marginal rate gives you only 1.74% more take-home, which may not keep pace with rising costs.
Tip: Negotiate based on take-home impact
When discussing a pay rise with your employer, know your marginal rate. If you're a higher-rate taxpayer, you could argue for non-cash benefits (pension contributions, EV scheme, additional holiday) which often give more value per pound.
Common Pay Rises
Approximate. No pension or student loan. Use the calculator for your exact figure.
Related Tools
Common Questions
Is a 5% raise good?
It depends on inflation. If CPI is 3%, a 5% gross raise gives ~2% real increase — but after tax your real gain may be less. Use the calculator to see your exact take-home impact.
Can a pay rise push me into a higher tax bracket?
Yes, but only the portion above the threshold is taxed at the higher rate — not your entire salary. You always take home more with a raise (except in extreme edge cases with child benefit).
Does a pay rise affect my student loan?
Yes. Student loan repayments are 9% (6% for postgrad) of income above the plan threshold. A higher salary means higher monthly repayments, but you also pay off the loan faster.