Pay Rise Calculator UK: What's Your Real Take-Home Increase?
2026/27 tax rates. Updated 17 April 2026.
Why the real rise is smaller than the gross rise
A pay rise is always taxed at your marginal rate, which is the rate you pay on your last pound of income, not the average rate you pay across your whole salary. This means that if you are already in the basic-rate band, you pay 20% income tax and 8% NI on every extra pound, keeping 72p of each £1 rise. If the rise tips you into the higher-rate band, the portion above £50,270 is taxed at 40% income tax and 2% NI, leaving you with only 58p of each extra pound in the higher-rate band.
The calculation gets more complicated when your income crosses a student loan repayment threshold or when you approach £100,000. Above £100,000, the personal allowance starts to be withdrawn, creating the effective 60% marginal rate known as the 60% tax trap.
Pay rise worked examples for 2026/27
£28,000 to £32,000 (staying in basic rate)
Gross rise
+£4,000
Extra tax
-£800 (20%)
Extra NI
-£320 (8%)
Net rise
+£2,880
The entire rise stays in the basic-rate band. You keep 72% of the gross increase. Simple.
You keep: 72% of the gross rise
£48,000 to £53,000 (crossing the 40% threshold)
Gross rise
+£5,000
Extra tax
-£1,108 (mixed: 20% to £50,270, then 40% above)
Extra NI
-£354 (8% to £50,270, then 2% above)
Net rise
+£3,538
The first £2,270 of the rise (from £48K to £50,270) is taxed at 20% income tax. The remaining £2,730 (from £50,270 to £53K) is taxed at 40%. This crossing of the threshold is where many people first feel the bite of the higher rate.
You keep: 71% overall (58% on the portion in higher rate) of the gross rise
£58,000 to £65,000 (already in higher rate)
Gross rise
+£7,000
Extra tax
-£2,800 (40%)
Extra NI
-£140 (2% above UEL)
Net rise
+£4,060
Once you are fully inside the higher-rate band, the calculus is straightforward: 40% tax, 2% NI above the upper earnings limit, leaving 58p of every extra pound.
You keep: 58% of the gross rise
£95,000 to £110,000 (entering the 60% trap)
Gross rise
+£15,000
Extra tax
-£8,570 (40% plus personal allowance taper = 60%)
Extra NI
-£300 (2%)
Net rise
+£6,130
Above £100,000, the personal allowance tapers at £1 for every £2 of income over £100,000. Combined with 40% income tax, the marginal rate on income between £100,000 and £125,140 is effectively 60%. On a £15,000 rise from £95K to £110K, roughly half sits in the 60% trap zone. You keep only £6,130 of the £15,000 gross rise.
You keep: 41% of the rise above £100,000 of the gross rise
£120,000 to £130,000 (above personal allowance taper)
Gross rise
+£10,000
Extra tax
-£4,514 (45% additional rate on income above £125,140)
Extra NI
-£200 (2%)
Net rise
+£5,286
Once your income exceeds £125,140, the personal allowance is fully withdrawn and the additional rate of 45% applies. At this level you keep about 53% of each extra pound. This is actually better than the 60% trap band below it.
You keep: 53% of the gross rise
When a pay rise triggers or increases student loan repayments
If your pay rise takes your income above a student loan repayment threshold, deductions begin immediately on any income above the threshold. The 2026/27 thresholds and rates are shown below.
| Plan | Threshold (2026/27) | Repayment rate | Cost of a rise from below to £35K |
|---|---|---|---|
| Plan 1 | £26,065 | 9% | £804/yr (if £26K to £35K) |
| Plan 2 | £29,385 | 9% | £506/yr (if £29K to £35K) |
| Plan 4 | £32,745 | 9% | £203/yr (if £32K to £35K) |
| Plan 5 | £25,000 | 9% | £900/yr (if £25K to £35K) |
| Postgraduate | £21,000 | 6% | £840/yr (if £21K to £35K) |
Taking a pay rise as pension contribution
If you are a higher-rate or 60%-trap taxpayer, one strategy is to ask your employer to direct some or all of your pay rise into a salary sacrifice pension contribution. Your take-home pay stays the same, but the pension contribution attracts tax relief at your marginal rate plus an NI saving. At 40%, a £5,000 salary sacrifice pension contribution costs you only £2,900 in take-home pay (saving £2,100 in tax and NI).
Model this with our pension sacrifice calculatorFrequently asked questions
Why do I keep so little of a pay rise?+-
A pay rise is taxed at your marginal rate, not your average rate. If you are in the basic-rate band (earning between £12,570 and £50,270), you keep 72% of a gross pay rise after income tax (20%) and NI (8%). If your pay rise pushes you into the higher-rate band, you keep only 58% of the portion above £50,270. If your rise takes you above £100,000, the personal-allowance taper means you may keep as little as 38% of income in the £100,000 to £125,140 range.
What is the 60% tax trap and how does a pay rise trigger it?+-
Between £100,000 and £125,140, your personal allowance is withdrawn at £1 for every £2 of income. Combined with the 40% income tax rate and 2% NI, the effective marginal rate on income in this band is 60% to 62%. A pay rise from £95,000 to £110,000 means you keep only around £6,000 of a £15,000 gross pay rise. The most effective way to avoid this is to sacrifice the extra income into a pension, bringing your adjusted net income back below £100,000.
Does a pay rise affect my student loan repayments?+-
Yes, if a pay rise takes your income above a student loan repayment threshold, deductions begin or increase. The 2026/27 thresholds are: Plan 1 at £26,065, Plan 2 at £29,385, Plan 4 at £32,745, Plan 5 at £25,000, and Postgraduate Loan at £21,000. You repay 9% (or 6% for Postgraduate) of income above the threshold, so a rise that crosses a threshold adds a further deduction on top of tax and NI.