Pay rise take home: how much of a UK pay rise will you actually keep?
By Dany, RightSums team · Last reviewed · Checked against: GOV.UK, ONS, HMRC
In the 2026/27 tax year you keep 72p of each extra £1 of salary at the basic rate, 58p at the higher rate, 38p between £100,000 and £125,140 and 53p above that, in England, Wales and Northern Ireland. A student loan takes another 9p, and the Child Benefit charge takes more between £60,000 and £80,000.
Key facts
- A 3% rise on a £30,000 salary adds £648 a year (£54 a month) to take-home pay in 2026/27.
- UK consumer prices rose 3.1% in the 12 months to August 2026, according to the ONS, so a 3% rise is a real-terms cut.
- On £30,000, you need a rise to £31,082 (3.6%) for take-home pay to keep pace with 3.1% inflation.
- The High Income Child Benefit Charge takes 1% of Child Benefit for every £200 of adjusted net income over £60,000, and all of it at £80,000.
- Plan 2 student loans take 9% of pay over £29,385 a year, so a basic rate taxpayer keeps 63p of each extra £1 above that threshold.
- Between £100,000 and £125,140, a £10,000 rise adds only £3,800 to take-home pay because the Personal Allowance is withdrawn.
How much of each extra £1 you keep, by income band
The share of a pay rise you keep depends on the band the extra pay falls in, not on your total salary. For an employee in England, Wales or Northern Ireland in 2026/27, Income Tax is 20% from £12,571 to £50,270, 40% to £125,140 and 45% above that, according to GOV.UK. Employee National Insurance is 8% on earnings from £242 to £967 a week and 2% above £967 a week.
| Where the rise falls | Income Tax | National Insurance | You keep |
|---|---|---|---|
| £12,570 to £50,270 | 20% | 8% | 72p |
| £50,270 to £100,000 | 40% | 2% | 58p |
| £100,000 to £125,140 | 60% (40% plus allowance taper) | 2% | 38p |
| Over £125,140 | 45% | 2% | 53p |
| Scotland, £43,663 to £50,270 | 42% | 8% | 50p |
The pay rise calculator gives the same results for a £1,000 rise: £720 more a year on £30,000, £580 on £55,000 and £530 on £130,000. That £1,000 rise at the basic rate is worth £60 a month.
Scottish taxpayers have a band most calculators miss. According to GOV.UK, the Scottish higher rate of 42% starts at £43,663, but the 8% National Insurance rate runs to £50,270, the same as the rest of the UK. A rise from £44,000 to £46,000 in Scotland adds £1,000 to take-home pay, exactly half.
Worked example: a 3% rise on £30,000 at the basic rate
A 3% rise on £30,000 is £900 a year gross and £648 a year after tax, or £54 a month. The inputs for the pay rise calculator are: country UK, current salary £30,000, rise 3%, no pension, no student loan, inflation 3.1%.
| Item | Before | After | Change |
|---|---|---|---|
| Gross pay | £30,000.00 | £30,900.00 | +£900.00 |
| Income Tax | £3,486.00 | £3,666.00 | +£180.00 |
| National Insurance | £1,394.40 | £1,466.40 | +£72.00 |
| Take-home pay | £25,119.60 | £25,767.60 | +£648.00 |
Income Tax takes 20% of the £900 and National Insurance 8%, so 72% is left. The same result appears in the UK salary take-home calculator if you enter £30,000 and then £30,900 for 2026/27.
Why a 3% pay rise can be a real-terms pay cut
A 3% rise is a real-terms cut when prices rise faster than 3%. According to the Office for National Statistics, the Consumer Prices Index rose by 3.1% in the 12 months to August 2026, in figures released on 16 September 2026. A 3% rise therefore buys 0.1% less than your old salary did a year earlier.
Take-home pay does worse than gross pay. In the £30,000 example, gross pay rises 3% but take-home pay rises only 2.58%, from £25,119.60 to £25,767.60. After 3.1% inflation, your take-home pay is 0.5% lower in real terms. The reason is that the rise is taxed at your top rate of 28%, while your pay as a whole loses only about 16.3% to tax and National Insurance, because the first £12,570 is tax-free.
Frozen thresholds make this worse each year. GOV.UK lists the same £12,570 Personal Allowance and £50,270 higher rate threshold for 2025/26 and 2026/27, so any rise pulls more of your pay into the tax bands.
What rise you need to stand still
- To match inflation on gross pay: £30,930, a 3.1% rise.
- To match inflation on take-home pay: £31,082, a 3.6% rise, according to the pay rise engine.
If you are negotiating, the second figure is the one that keeps your spending power where it was. The pay rise calculator works it out for any salary and inflation rate.
What happens when a rise takes you into the 40% band
A rise that crosses £50,270 is taxed at 20% below the line and 40% above it, so you keep 72p of each pound up to £50,270 and 58p after. National Insurance falls from 8% to 2% at the same point, which softens the jump.
Worked example: £48,000 to £52,000
A £4,000 rise from £48,000 to £52,000 adds £2,637.80 to take-home pay in 2026/27, which is 66% of the rise. Of the £4,000, £2,270 is taxed at 20% and £1,730 at 40%, so Income Tax rises by £1,146. National Insurance rises by £216.20: 8% on £2,270 and 2% on £1,730.
Crossing into the higher rate does not tax your whole salary at 40%. Only the pounds above £50,270 pay the higher rate, which is why a rise is never worth less than nothing through Income Tax alone.
How the Child Benefit charge eats into rises between £60,000 and £80,000
If you or your partner claim Child Benefit, the High Income Child Benefit Charge takes back 1% of it for every £200 of adjusted net income over £60,000, and all of it at £80,000, according to GOV.UK. The partner with the higher adjusted net income pays the charge. According to GOV.UK, Child Benefit is £27.05 a week for the eldest child and £17.90 for each other child, so two children bring in £2,337.40 a year.
With two children, each £200 over £60,000 costs £23.37 of Child Benefit, roughly an extra 11.7% on top of 40% Income Tax and 2% National Insurance.
Worked example: £58,000 to £62,000 with two children
A £4,000 rise from £58,000 to £62,000 adds £2,320 to take-home pay before the charge. The charge is 10% of £2,337.40, which is £233.74, so the household is £2,086.26 better off, keeping 52% of the rise.
Worked example: 3% on £70,000 with two children
A 3% rise from £70,000 to £72,100 adds £1,218 to take-home pay, but the charge rises from 50% to 60% of Child Benefit, an extra £233.74. The net gain is £984.26, or 47% of the £2,100 rise. With inflation at 3.1%, the household's spending power falls by 1.1% in real terms.
You can pay the charge through PAYE, which HMRC collects by changing your tax code, or through Self Assessment. Paying into a pension by salary sacrifice lowers adjusted net income and reduces the charge. To see the effect, tick the Child Benefit box in the pay rise calculator and enter the number of children.
How student loan repayments reduce a pay rise
A student loan takes 9% of pay above your plan's threshold, or 6% for a Postgraduate Loan, so a basic rate taxpayer on Plan 2 keeps 63p of each extra £1. According to GOV.UK, the repayment is based on income before tax, including bonuses and overtime, and the amount you owe does not change how much you repay each year.
| Plan | Yearly threshold | Monthly threshold | Rate |
|---|---|---|---|
| Plan 1 | £26,900 | £2,241 | 9% |
| Plan 2 | £29,385 | £2,448 | 9% |
| Plan 4 (Scotland) | £33,795 | £2,816 | 9% |
| Plan 5 | £25,000 | £2,083 | 9% |
| Postgraduate Loan | £21,000 | £1,750 | 6% |
Worked example: 5% on £35,000 with a Plan 2 loan
A 5% rise from £35,000 to £36,750 is £1,750 gross. Without a loan you would keep £1,260. With a Plan 2 loan, repayments rise from £505.35 to £662.85, so the loan takes £157.50 and you keep £1,102.50, which is 63% of the rise. Enter plan 2 in the student loan field of the pay rise calculator to see this.
Repayments are worked out on each payslip. According to GOV.UK, a bonus or overtime that takes one month's pay over the monthly threshold triggers a repayment that month, and you can ask for a refund after the tax year if your annual income stayed under the yearly threshold.
What a rise between £100,000 and £125,140 is worth
A rise in the £100,000 to £125,140 band is worth only 38% of its gross value, because you lose £1 of Personal Allowance for every £2 of adjusted net income over £100,000, according to GOV.UK. A £10,000 rise from £100,000 to £110,000 adds £3,800 to take-home pay: Income Tax rises by £6,000 and National Insurance by £200.
Sacrificing the rise into a pension restores the allowance. With salary sacrifice, according to HMRC's guidance, only the reduced salary is subject to tax and National Insurance, so £10,000 into a pension costs £3,800 of take-home pay. Crossing £100,000 also ends Tax-Free Childcare and 30 hours of funded childcare in England, which can make a small rise leave you worse off overall.
How to check a pay rise before you accept it
Work out the monthly take-home difference, not the headline percentage. These steps use the pay rise calculator:
- Enter your current salary and the rise as a percentage, a new salary or an amount.
- Add your pension percentage and student loan plan, if you have them.
- Tick the Child Benefit box if you or your partner claim it, and enter the number of children.
- Leave inflation at the latest ONS figure of 3.1%, or enter your own.
- Compare the extra take-home a month with the salary needed to keep pace with inflation on take-home pay.
Your first payslip after a rise can look different from the calculator if your tax code changes, or if back pay arrives in one month. For a full breakdown of any salary, use the UK take-home pay calculator.
Work it out for your own figures
- Pay Rise Calculator: See how much more you take home from a pay rise or raise after tax, and whether it beats inflation. UK 2026/27 and US 2026 rules.
- UK Take-Home Pay Calculator: Work out your UK take-home pay after Income Tax, National Insurance, pension and student loan for 2026/27, per year, month and week.
Frequently asked questions
How much is a £1,000 pay rise after tax?
A £1,000 pay rise is worth £720 a year, or £60 a month, at the basic rate in 2026/27. At the higher rate it is worth £580, between £100,000 and £125,140 it is £380, and above £125,140 it is £530. A student loan takes another £90 once you are over its threshold.
Is a 3% pay rise a real terms pay cut?
Yes, a 3% pay rise is a small real-terms cut while inflation is 3.1%, the ONS figure for the 12 months to August 2026. On £30,000 your take-home pay rises only 2.58%, so your spending power falls about 0.5%. You need about 3.6% to keep take-home pay level.
Why is my pay rise less than I expected?
Your pay rise is taxed at your highest rate, not your average rate. At the basic rate, 28p of each extra £1 goes in Income Tax and National Insurance, and 42p at the higher rate. Student loans, pension contributions and the Child Benefit charge can take more.
Does a pay rise affect Child Benefit?
Yes, a pay rise affects Child Benefit if it takes the higher earner's adjusted net income over £60,000. The High Income Child Benefit Charge then takes back 1% of Child Benefit for every £200 over £60,000, and all of it at £80,000. Salary sacrifice pension contributions reduce the charge.
Can a pay rise leave me worse off?
Income Tax and National Insurance alone never leave you worse off, because only the extra pounds are taxed at the higher rate. A rise can leave you worse off overall if it takes adjusted net income just over £100,000, where Tax-Free Childcare and 30 hours of funded childcare in England stop.
Sources
- GOV.UK: Income Tax rates and Personal Allowances (retrieved )
- GOV.UK: National Insurance, how much you pay (retrieved )
- GOV.UK: Income Tax in Scotland (retrieved )
- ONS: Consumer price inflation, UK: August 2026 (retrieved )
- GOV.UK: High Income Child Benefit Charge (retrieved )
- GOV.UK: Child Benefit, what you'll get (retrieved )
- HMRC: Adjusted net income (retrieved )
- GOV.UK: Repaying your student loan, what you pay (retrieved )
- HMRC: Salary sacrifice for employers (retrieved )
- GOV.UK: Tax-Free Childcare, check if you're eligible (retrieved )
- GOV.UK: Free Childcare for Working Parents (retrieved )
Terms used in this guide
- Adjusted net income: Adjusted net income is your total taxable income less certain reliefs, such as grossed-up pension contributions and Gift Aid; HMRC uses it for several tests.
- High Income Child Benefit Charge: The High Income Child Benefit Charge claws back 1% of Child Benefit for every £200 of adjusted net income over £60,000, and all of it at £80,000.
- Marginal tax rate: Your marginal tax rate is the share of your next pound or dollar of income that goes in tax and deductions.
- National Insurance: National Insurance is a UK tax on earnings that builds State Pension entitlement; employees pay 8% between £12,570 and £50,270 and 2% above in 2026/27.
- Personal Allowance: The Personal Allowance is the income you can earn each UK tax year before Income Tax starts: £12,570 for 2026/27.
- Salary sacrifice: Salary sacrifice is an agreement to give up some cash pay for a non-cash benefit, often a pension contribution, cutting Income Tax and National Insurance.