Pay rise calculator
A pay rise is taxed at your marginal rate, so you never keep all of it. This shows the new take-home and the share of the rise you actually keep.
Why you keep less than the headline
A rise stacks on top of pay you are already taxed on, so every extra pound is taxed at your marginal rate. In the basic-rate band that is 20% income tax and 8% National Insurance, so 28p of each extra pound goes and you keep 72p. Cross £50,270 and the slice above is taxed at 40% plus 2% National Insurance, leaving about 58p.
The average rate on your whole salary is lower than this, which is why a rise can feel disappointing. The number that matters is the marginal rate on the new money, and that is what this tool applies.
Worked example
On a £35,000 salary a 5% rise is £1,750 of extra gross pay. It stays inside the basic-rate band, so 20% tax and 8% National Insurance come off, leaving about £1,260 in take-home pay, an extra £105 a month. If the same rise pushed part of your pay over £50,270, that part would be taxed at 40% and the kept share would fall.
Common questions
How much of a pay rise do I actually keep?
On a £35,000 salary a 5% rise adds £1,750 gross, but only about £1,260 reaches your account after tax and National Insurance. That is roughly 72.0% of the rise, or £105 more a month.
Why do I keep so little of my pay rise?
A rise is added on top of income you are already taxed on, so it is taxed at your marginal rate, not your average rate. In the basic band that is 20% tax plus 8% National Insurance, so you keep about 72p in the pound. In the 40% band you keep about 58p.
Can a pay rise push me into a higher tax band?
Only the part of the rise above £50,270 is taxed at 40%, not your whole salary. You are never worse off overall from a rise, but the slice above the threshold is taxed more heavily, so the kept share drops.
What about the £100,000 trap?
Between £100,000 and £125,140 your personal allowance is withdrawn, which creates an effective 60% rate on that band. A rise landing there can be kept at barely 40p in the pound once National Insurance is added. Paying the rise into a pension can sidestep it.