Pay Rise Calculator UK 2025–26
Enter your current and new salary to see exactly how much of your pay rise you keep after income tax and National Insurance — and what your new monthly take-home will be.
How a pay rise is taxed in the UK
When you receive a pay rise, the extra earnings are taxed at your marginal rate — the rate applicable to the highest portion of your income. Because of this, the benefit of a pay rise is often less than the headline figure suggests.
Marginal tax rates for 2025–26
For most employees in England, Wales, and Northern Ireland, the combined income tax and employee NI on a pay rise works out as follows:
- Basic rate band (£12,570–£50,270): 20% income tax + 8% NI = 28% total deduction, keeping 72%
- Higher rate band (£50,271–£100,000): 40% income tax + 2% NI = 42% total deduction, keeping 58%
- PA taper zone (£100,001–£125,140): effectively 60%+ income tax + 2% NI — the most punishing band
- Additional rate (above £125,140): 45% income tax + 2% NI = 47% total deduction, keeping 53%
The personal allowance trap
Between £100,000 and £125,140, the personal allowance is withdrawn at £1 for every £2 of income earned above £100,000. This creates an effective 60% income tax rate on that income. A pay rise that pushes you into this band is significantly less valuable than one that keeps you below it. If your salary is near £100,000, pension contributions can be highly effective at preserving your full personal allowance.
Salary sacrifice strategies
Salary sacrifice pension contributions reduce your gross pay before tax and NI are calculated. This means you avoid both income tax and employee NI on the sacrificed amount. For a basic rate taxpayer, every £1 of salary sacrifice only costs £0.72 net, and the full £1 goes into your pension. For higher rate taxpayers the saving is even greater.
Frequently asked questions
How much of a pay rise do I actually keep after tax?
It depends on your tax band. If your pay rise keeps you within the basic rate band (income £12,570–£50,270), you keep around 68% of the increase after 20% income tax and 8% employee NI. If your rise pushes you into the 40% higher rate band, you keep only around 52% of the portion above £50,270. Above £100,000 the personal allowance tapers, creating an effective 60%+ marginal rate.
Does a pay rise affect my National Insurance?
Yes — employee NI is charged at 8% on earnings between £12,576 and £50,270, and 2% above £50,270. If your pay rise stays within the 8% NI band, you pay 8% more NI on the extra income as well as income tax at 20%. Combined, you keep about 72% of the increase before considering NI (68% including NI).
What is the effective keep rate?
The keep rate is the percentage of your gross pay rise that you actually take home. It accounts for both income tax and employee NI at your marginal rates. For most basic rate taxpayers a pay rise has a keep rate of around 68–72%. This is why a £5,000 gross pay rise results in only about £3,400–£3,600 of extra take-home pay.
Does my pay rise affect my student loan repayments?
If your income crosses the threshold for your student loan plan, or you already repay, any additional salary above the threshold triggers additional repayments at 9% (undergraduate plans) or 6% (postgraduate). This further reduces the effective keep rate. For a Plan 2 borrower in the basic rate band, you keep approximately 61% of a pay rise rather than 72%.
Can I reduce the tax on my pay rise through salary sacrifice?
Yes — increasing your pension contributions via salary sacrifice reduces your taxable income and means you pay less income tax and NI on the extra earnings. If your employer matches higher contributions, the overall benefit is even greater. The salary sacrifice calculator can model the exact saving for your situation.
Related calculators
This calculator provides estimates only. Results are based on the 2025–26 tax year. Credibrate is not a tax adviser. For personalised advice speak to a qualified accountant.