Pay Rise Calculator UK 2026

How Much of a Pay Rise Do You Actually Keep?

A pay rise is taxed at your marginal rate — the rate on your top slice of income — plus National Insurance, so you never take home the full amount. A basic-rate taxpayer keeps 72% of a rise (after 20% tax and 8% NI), while a higher-rate taxpayer keeps 58% (40% tax and 2% NI). Crossing a threshold, such as £50,270, means part of the rise is taxed at the higher rate.

What You Keep From a Pay Rise (2026/27)

The £100k–£125,140 band loses the personal allowance at £1 for every £2, creating a ~60% effective rate.

Watch Out for Hidden Thresholds

A pay rise can quietly push you past a threshold that costs far more than the higher tax band alone. The biggest is the £100,000 mark: for every £2 earned above it, you lose £1 of your personal allowance, creating an effective tax rate of around 60% between £100,000 and £125,140. Crossing it can also cost you tax-free childcare and 30 free childcare hours. Similarly, a rise can trigger the High Income Child Benefit Charge or, in the US, move part of your income into a higher bracket. Knowing these cliffs helps you decide whether to divert a rise into a pension instead.

How to Keep More of a Pay Rise

• Salary sacrifice into your pension. Redirecting some or all of a rise into a pension can keep you below a threshold and get tax relief at your marginal rate.
• Use tax-efficient benefits. Cycle-to-work, EV schemes and additional pension contributions are taken before tax.
• Check your tax code. After a rise, make sure HMRC has updated your code so you are not over- or under-taxed.
• Remember the rise compounds. Even after tax, a higher base salary raises every future rise, bonus and pension contribution.

Frequently Asked Questions