Pay Rise Calculator, 2026/27

How this is calculated

The calculator works out net take-home pay both before and after the rise, using the 2026/27 personal allowance, basic rate band and higher rate threshold together with employee NIC at 8.0% up to the upper earnings limit and 2.0% above it. The difference between the two net figures is the real increase in what lands in your bank account.

This matters because a rise that tips you from basic rate into higher rate tax, or from below £100,000 total income to above it, can mean you keep a noticeably smaller share of the increase than a rise that stays within the same band.

Why the percentage you keep varies

If your whole pay rise stays within the basic rate band, you keep roughly 68p in every extra £1 after 20% tax and 8% NIC. Once you cross into higher rate tax, that drops to around 58p in the £1 for the portion above the threshold, and it falls further, to around 41p, in the personal allowance taper zone between £100,000 and £125,140 where you lose allowance at the same time as paying higher rate tax.

Company directors who take a mix of salary and dividends should also check the effect of a salary increase on how much profit remains available for dividends, since a higher salary reduces the pool left in the company after tax.

Making the most of a pay rise

If a pay rise would tip you into the personal allowance taper or a higher tax band, agreeing to take part of it as an increased employer pension contribution avoids that band entirely while still increasing your total reward. This is a common negotiating point when a rise would otherwise be heavily eroded by tax.

It is also worth checking whether a pay rise affects means-tested benefits such as tax-free childcare or the high income child benefit charge, both of which use different income definitions from the income tax bands used here.

Why don't I keep the full percentage pay rise?

Because income tax and employee National Insurance apply to the extra pay just as they do to your existing salary, so a 5% gross rise typically becomes a smaller percentage increase in your actual take-home pay.

Does a pay rise affect my pension contributions?

If your pension contributions are calculated as a percentage of salary, yes, a higher salary means higher contributions in cash terms, which is worth factoring in alongside the net pay increase shown here.

What if my pay rise pushes me over £100,000?

Above £100,000 you lose £1 of personal allowance for every £2 of income, creating an effective marginal rate of around 60% on the portion between £100,000 and £125,140, so the calculator applies this taper automatically.

Should I ask for a pension contribution instead of a pay rise?

It depends on your circumstances, but if a rise would fall in the taper zone or push you into higher rate tax, sacrificing it into a pension avoids that extra tax and NIC entirely, though the money is then locked away until retirement.