How much of a UK pay rise do I actually keep?

Depends entirely on where your current salary and the rise sit relative to the tax band thresholds. A pay rise fully inside the basic-rate band (£12,570 to £50,270) keeps 72p per £1 raised after 20% IT + 8% NI. A rise fully inside the higher-rate band (£50,270 to £100,000) keeps 58p per £1 after 40% IT + 2% NI. A rise inside the £100,000-£125,140 Personal Allowance taper keeps only 38p per £1 - the highest effective marginal rate in the UK income-tax structure.

What is the effective tax rate on a pay rise?

The effective tax rate on a pay rise is the IT and NI taken from each marginal pound of the rise. It is the headline marginal rate where the rise lands (28%, 42%, or 47%) unless the rise spans a threshold, in which case it is a weighted blend across the bands. The calculator computes the exact figure for your inputs.

Why does my pay rise feel smaller than expected?

Two common reasons: (1) the rise crossed a band threshold so part of it is taxed at the next higher rate, and (2) PAYE may have used a cumulative method that estimated a full-year salary from the new monthly figure and over-withheld. The latter usually self-corrects across the remaining months.

Should I salary-sacrifice a pay rise into pension?

It is worth considering, especially if the rise pushes you into the £100k PA-taper band (62% effective marginal). Sacrificing the marginal pounds keeps the full uplift in your pension pot at zero Income Tax cost, vs receiving 38p per £1 as cash. The trade-off is liquidity - pension money is locked until age 57 (rising to 58 in 2028).

Does the rise affect my pension contribution amount?

If your pension is a fixed percentage of salary (common workplace schemes), the contribution automatically goes up with the rise. If your contribution is a fixed pound amount or you cap it, only the rise less your existing contribution increases. The pension uplift gets full tax relief at the marginal rate, often making the after-pension take-home delta smaller but the total comp delta larger.

Pay Rise on a £50,000 UK Salary (2026/27)

On a £50,000 UK gross salary, the actual take-home increase from a pay rise depends on which tax band the rise lands in. Marginal Income Tax + NI rates: 28% basic, 42% higher, 62% inside the £100k-£125,140 PA-taper trap, 47% additional rate.

Pay rise scenarios

Rise %	New salary	Gross rise	Take-home delta	+ per month	Effective deduction
3%	£51,500	£1,500	£908	£76	39.5%
5%	£52,500	£2,500	£1,488	£124	40.5%
7%	£53,500	£3,500	£2,068	£172	40.9%
10%	£55,000	£5,000	£2,938	£245	41.2%
15%	£57,500	£7,500	£4,388	£366	41.5%

Effective deduction = how much of each gross rise pound goes to Income Tax + NI. Higher number means worse "real" pay rise. Inside the £100k-£125,140 band the figure jumps to ~62%.

Cite or embed - free under CC BY 4.0

Frequently asked questions

How much of a UK pay rise do I actually keep?: Depends entirely on where your current salary and the rise sit relative to the tax band thresholds. A pay rise fully inside the basic-rate band (£12,570 to £50,270) keeps 72p per £1 raised after 20% IT + 8% NI. A rise fully inside the higher-rate band (£50,270 to £100,000) keeps 58p per £1 after 40% IT + 2% NI. A rise inside the £100,000-£125,140 Personal Allowance taper keeps only 38p per £1 - the highest effective marginal rate in the UK income-tax structure.
What is the effective tax rate on a pay rise?: The effective tax rate on a pay rise is the IT and NI taken from each marginal pound of the rise. It is the headline marginal rate where the rise lands (28%, 42%, or 47%) unless the rise spans a threshold, in which case it is a weighted blend across the bands. The calculator computes the exact figure for your inputs.
Why does my pay rise feel smaller than expected?: Two common reasons: (1) the rise crossed a band threshold so part of it is taxed at the next higher rate, and (2) PAYE may have used a cumulative method that estimated a full-year salary from the new monthly figure and over-withheld. The latter usually self-corrects across the remaining months.
Should I salary-sacrifice a pay rise into pension?: It is worth considering, especially if the rise pushes you into the £100k PA-taper band (62% effective marginal). Sacrificing the marginal pounds keeps the full uplift in your pension pot at zero Income Tax cost, vs receiving 38p per £1 as cash. The trade-off is liquidity - pension money is locked until age 57 (rising to 58 in 2028).
Does the rise affect my pension contribution amount?: If your pension is a fixed percentage of salary (common workplace schemes), the contribution automatically goes up with the rise. If your contribution is a fixed pound amount or you cap it, only the rise less your existing contribution increases. The pension uplift gets full tax relief at the marginal rate, often making the after-pension take-home delta smaller but the total comp delta larger.