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Pay Raise Calculator UK

Compute the new salary, annual increase, and monthly bump from a percentage raise. £35,000 + 5% = £36,750 new salary, £146/month gross increase. After UK tax (basic-rate ~28% combined IT+NI), you keep ~£105/month of that.

Last verified: 25 April 2026 Source: GOV.UK — Income Tax rates Next review: 25 October 2026
Inputs
Outcome —
New salary —
Annual increase —
Monthly increase (gross) —
After-tax estimate —
5% raise on £35k
£35,000 current · 5% raise

£35,000 × 1.05 = £36,750 new salary. £1,750/year increase, ~£146/month gross. Take-home increase ~£105/month.

10% raise on £50k
£50,000 current · 10% raise

£50,000 × 1.10 = £55,000. £5,000 extra. £4,730 of which falls into higher-rate (40% IT + 2% NI = 42% marginal), leaving ~£2,891 net. Crossing £50,270 hurts the marginal raise.

3% inflation match on £45k
£45,000 current · 3% raise

£45,000 × 1.03 = £46,350. £1,350/year. With UK inflation often 2-4%, a 3% raise is a real-terms wage freeze.

When you negotiate a raise or receive an annual review, the % figure tells you the headline change. The calculator above translates that into your new monthly take-home — which is the only figure that matters for budgeting.

The maths

New salary = Current salary × (1 + raise % / 100)

For £35,000 + 5%: £35,000 × 1.05 = £36,750. £1,750 annual increase, £146/month gross.

Take-home reality at different bands

The % you keep of a raise depends entirely on what tax band the increase falls in:

Income band Marginal rate % kept of raise
£12,570 - £50,270 28% (20% IT + 8% NI) 72%
£50,270 - £100,000 42% (40% IT + 2% NI) 58%
£100,000 - £125,140 60% (40% IT + 2% NI + PA taper) 40%
£125,140 - £150,000 42% 58%
£150,000+ 47% (45% IT + 2% NI) 53%

For most UK employees a 5% raise is worth ~3.6% in take-home. The 60% band (£100k-£125,140) is the worst — pension contributions are particularly tax-efficient there.

Real vs nominal raises

A 3% raise during 4% inflation is a real-terms pay cut. Compare your raise to UK inflation (CPI), not to zero:

  • Real-terms cut: raise < inflation
  • Real-terms freeze: raise = inflation
  • Real raise: raise > inflation

Typical UK CPI 2-4%. ‘Above-inflation’ raise is typically the political messaging.

Cumulative raises over time

Early-career raise trajectory has enormous long-term impact:

  • 3% annual raises × 20 years: 80% increase
  • 5% annual raises × 20 years: 165% increase
  • 7% annual raises × 20 years: 287% increase

£30k starting → £54k (3%), £80k (5%), £116k (7%) after 20 years. The compounding effect favours job-hopping every 2-3 years (which yields 10-25% jumps) over staying put for 3% annual increments.

What this calculator doesn’t include

  • Pension contributions (% of gross — reduce taxable income)
  • Salary sacrifice arrangements
  • Bonus structures (one-off payments)
  • Student loan repayments (9% above threshold)
  • Multi-year compounding

For full take-home maths, run the new salary through the Take Home Pay calculator.

Common mistakes
  • Forgetting the marginal rate trap at £50,270. A raise that pushes you across the higher-rate boundary loses 42p in the £ above £50,270 (vs 28p below). £49k → £55k looks like £6,000 more but nets only ~£3,400.
  • Not accounting for personal allowance taper above £100k. £100k-£125,140 has 60% effective marginal rate. A £10k raise from £100k to £110k earns £4,000 net — half of what £40k → £50k would yield.
  • Confusing percentage of salary with percentage of take-home. A 5% raise on gross is NOT a 5% increase in take-home, because tax bands compress higher income. Take-home percentage increases are typically 1-2pp lower than gross percentage increases.
  • Comparing raises without considering inflation. UK CPI of 3% means a 3% raise is a real-terms freeze. Real raises require nominal increases of (inflation + desired real increase). A ‘good raise’ is typically 5-7% nominal in normal-inflation years.
  • Forgetting that raise compounds for future years. Annual raises compound. 5% × 5 years = 27.6% cumulative (not 25%) due to compounding. Long-term salary trajectories are very sensitive to early-career raise rates.
What this calculator doesn't cover
  • Take-home estimate uses 28% combined IT+NI (basic-rate level). Higher earners face 42% or 60% marginal rates.
  • Doesn’t model student loan repayments (9% above threshold).
  • Doesn’t include pension auto-enrolment effects.
  • Single-year focused — doesn’t model compounded raises over multiple years.

Frequently asked questions

How much take-home do I keep from a raise?

Depends on your starting salary. Below £50,270: 72% (28% goes to IT + NI). £50,270-£100k: 58% (42% to IT + NI). £100k-£125,140: 40% (60% to IT + NI + PA taper). Above £125,140: 53%. Bigger raises that span band boundaries are partial-rate.

What's a typical UK pay raise?

2-3% annual cost-of-living adjustments are standard for stable roles. 5-8% for promotions. 10-25% for job moves. UK average wage growth in 2024-2025 was ~5-6%.

Should I negotiate a raise or move jobs?

Job moves yield 10-25% increases on average; internal raises 3-7%. Job-hopping every 2-3 years often outperforms staying put for salary growth, but other factors (stability, equity, learning, pension) matter.

How do I model multi-year raises?

Compound: salary × (1 + raise_pct)^years. £35k with 5% raises for 10 years = £57,032. The calculator above is single-year — multiply manually for cumulative.

What about bonus payments?

Bonuses are taxed at marginal rate when received. UK PAYE sometimes withholds at ‘emergency’ rate which gets refunded over subsequent paychecks. Net annual income is the same as if bonus were spread evenly. Calculator above doesn’t model bonuses — it’s for base salary changes only.

About this calculator. Maintained by Jordan — a UK seller and creator who actually uses these platforms (Etsy, eBay, Vinted, DistroKid). Built to be accurate, mobile-fast, and honest about its limits. Spot a bug? Email hello@payoutmath.co.uk.