Guide · Pay rise
What a pay rise is worth after tax
How much of a pay rise you keep at each tax band, why some rises cost you more than others and a worked example of a £3,000 rise. Start by new salary minus old salary, or old salary × percentage.
By Uthman ChoudhuryPublished Updated
Skip the reading: use the Pay Rise Calculator for your own numbers.
How do you work out what a pay rise leaves you?
- Work out the gross rise. New salary minus old salary, or old salary × percentage.
- Find your marginal rate. The combined tax and NI rate on your next pound: 28% for basic rate, 42% for higher rate, 47% for additional rate, 62% between £100,000 and £125,140.
- Add other deductions. Percentage pension contributions and student loan repayments (9%) apply to the rise too.
- Calculate what you keep. Gross rise × (1 − marginal rate − pension % − loan %) is roughly the extra take-home.
- Check for band crossings. If the rise spans a threshold, split it: the part below at the lower rate, the part above at the higher rate.
How much of a pay rise do you keep?
A pay rise is taxed at your marginal rate, the rate on the top slice of your income, not your average rate. The extra pounds are the most heavily taxed pounds you earn. In 2026/27 a basic rate taxpayer keeps 72% of a rise, a higher rate taxpayer 58% and an additional rate taxpayer 53%, before pension and student loan deductions. Between £100,000 and £125,140 the personal allowance taper means you keep only 38%.
| Rise | Gross | Take-home | Kept |
|---|---|---|---|
| £28,000 to £30,000 | £2,000 | £1,440 | 72% |
| £45,000 to £48,000 | £3,000 | £2,160 | 72% |
| £49,000 to £52,000 | £3,000 | £1,918 | 64% |
| £70,000 to £75,000 | £5,000 | £2,900 | 58% |
| £99,000 to £104,000 | £5,000 | £2,100 | 42% |
Worked example: £3,000 rise from £49,000
The first £1,270 of the rise sits below the £50,270 higher rate threshold and is taxed at 28%, keeping £914. The remaining £1,730 is taxed at 42%, keeping £1,003. Total extra take-home £1,918, or £160 a month, from a £3,000 rise.
What do people get wrong about pay rises?
- Turning down a rise to stay under £50,270. Only the part above the threshold is taxed more; you never lose money by earning more through income tax alone.
- Forgetting benefit cliff edges. Child Benefit tapers from £60,000, and free childcare hours stop at £100,000; these can make a rise costly for parents.
- Not asking for the rise as a pension contribution. Above £100,000, an employer pension contribution can be worth far more than the same amount as salary.
Run your own figures in the pay rise calculator.
Frequently asked questions
What percentage of a pay rise is taxed?
For a basic rate taxpayer, 28% (20% tax and 8% NI). For a higher rate taxpayer, 42%. For someone between £100,000 and £125,140, 62%. A 9% student loan and any percentage pension come off as well.
Is a £5,000 pay rise worth it?
On £40,000, a £5,000 rise adds about £3,600 a year (£300 a month) to take-home pay. On £48,000 it adds about £3,150 because £2,730 of it falls into the 40% band. It is always worth more than nothing; the question is only how much.
Why does my pension go up when I get a rise?
Most workplace pensions are a percentage of salary, so the contribution grows with your pay. That reduces the visible take-home gain, but the money is still yours, saved with tax relief.
Related calculators and guides
- Pay Rise CalculatorFind out how much of a raise you keep after tax, NI, pension and student loan.
- Take-Home Pay CalculatorSee exactly what lands in your bank account after tax, NI, pension and student loan.
- Pension Contribution CalculatorSee the tax relief on your contributions and the real cost of paying into your pension.
- Student Loan Repayment CalculatorMonthly repayments, years to clear and whether your loan will be written off first.
- Tax Code ExplainerType in your tax code and find out what it means and whether it looks right.
- Salary to Hourly CalculatorBreak a salary down into what you earn per hour, day, week and month.
- GuideHow take-home pay is calculated in the UK