Reviewed by Mustafa Bilgic
Founder, WebCalculator
Calculations use the 2026/27 Income Tax and National Insurance rates published by HMRC and GOV.UK. Estimates only — not financial advice.
A pay rise of £1,000 does not mean £1,000 more in your pocket. Income Tax and National Insurance take a slice first. Enter your current salary and the new figure — or a percentage rise — to see exactly how much extra take-home pay you gain each month in the 2026/27 tax year.
Gross and take-home comparison
The gap between a gross raise and its net impact catches many people out. In the 2026/27 tax year the combined marginal rate for a basic-rate taxpayer is 28% (20% Income Tax + 8% NI). For a higher-rate taxpayer it is 42% (40% tax + 2% NI). That is the slice HMRC takes from each extra pound you earn.
| Earnings band | Income Tax | NI | Combined | You keep |
|---|---|---|---|---|
| Up to £12,570 | 0% | 0% | 0% | 100% |
| £12,571 – £50,270 | 20% | 8% | 28% | 72% |
| £50,271 – £100,000 | 40% | 2% | 42% | 58% |
| £100,001 – £125,140 | 60%* | 2% | 62% | 38% |
| Over £125,140 | 45% | 2% | 47% | 53% |
* The effective 60% rate occurs because the Personal Allowance is withdrawn at £1 for every £2 earned above £100,000.
A 5% pay rise on £30,000 adds £1,500 gross. Because both salaries sit in the basic-rate band:
You keep 72% of the raise. If the same raise pushed you above £50,270, the portion above the threshold would be taxed at 40% + 2% instead.
A rise that straddles the £50,270 boundary splits into two portions taxed at different rates. Suppose your salary goes from £48,000 to £52,000:
Many people worry a rise "costs more than it gives" — that is a myth. You always take home more after a raise, just at a declining marginal rate. If the higher rate concerns you, the pension sacrifice calculator shows how to redirect the taxed portion into retirement savings.
For a full salary breakdown at any level, use the salary calculator. To convert a pay rise into an hourly figure, try the hourly wage calculator. And if you are negotiating a raise, the employer cost calculator shows what the rise costs your employer after employer NI — useful ammunition for the conversation.
It depends on your tax band. A basic-rate taxpayer keeps 72% of a pay rise (after 20% Income Tax and 8% NI). A higher-rate taxpayer keeps only 58% (after 40% tax and 2% NI). Use the calculator above to see your exact figure.
Only the portion above the threshold is taxed at the higher rate. If a rise takes you from £48,000 to £52,000, only the £1,730 above £50,270 is taxed at 40%. The rest stays at 20%.
A 5% rise on £30,000 adds £1,500 gross. After 20% Income Tax and 8% NI, you keep about £1,080 extra per year — roughly £90 more per month.
A pay rise increases your take-home now but is taxed. A pension contribution increase is tax-free and often employer-matched, but you cannot access the money until at least age 55 (rising to 57 from 2028). The right choice depends on your priorities.
UK average pay growth was running at around 5-6% in 2025/26 according to ONS labour market data, though individual settlements vary widely by sector and role.