You have been offered a raise — congratulations. But once tax, National Insurance, and potentially student loan repayments take their cut, how much of that increase actually lands in your bank account? The answer depends heavily on which tax band the extra income falls into.
The real take-home from a £5K–£10K raise
The table below shows what happens to a pay rise at different salary points, using 2026/27 tax rates with no pension or student loan deductions.
| Current Salary | Raise | Extra Take-Home (Annual) | Extra Take-Home (Monthly) | Effective Tax Rate on Raise |
|---|---|---|---|---|
| £30,000 | £5,000 | £3,600 | £300 | 28% |
| £40,000 | £5,000 | £3,600 | £300 | 28% |
| £50,000 | £5,000 | £2,938 | £245 | 41% |
| £55,000 | £5,000 | £2,900 | £242 | 42% |
| £75,000 | £10,000 | £5,800 | £483 | 42% |
| £95,000 | £10,000 | £4,800 | £400 | 52% |
| £100,000 | £10,000 | £3,800 | £317 | 62% |
Why the rate jumps so dramatically
Income tax has three main bands. When a raise pushes you from one band into the next, the additional pounds are taxed at the higher rate:
- Basic Rate (20% tax + 8% NI = 28% combined) — on income between £12,571 and £50,270. A £5K raise here gives you roughly £3,600 extra.
- Higher Rate (40% tax + 2% NI = 42% combined) — on income between £50,271 and £125,140. A £5K raise here gives you roughly £2,900.
- The £100K trap (60% tax + 2% NI = 62% combined) — between £100,000 and £125,140, the Personal Allowance is tapered away. A £10K raise here yields only about £3,800 — less than the same raise at £30K.
See our £100K tax trap guide for a deep dive on the Personal Allowance taper.
What about student loan repayments?
If you have a student loan, the effective rate on your raise is even higher. Student loan repayments add 9% (or 6% for Postgraduate Loans) on top of tax and NI for income above the repayment threshold. For a basic rate taxpayer with a Plan 2 loan:
- Combined rate on raise: 20% tax + 8% NI + 9% student loan = 37%
- A £5,000 raise yields approximately £3,150 (not £3,600)
See our student loan repayments guide for full threshold details.
Strategies to keep more of your raise
- Increase pension contributions. Redirecting some or all of a raise into your pension (especially via salary sacrifice) means you avoid both tax and NI on that amount. The money grows tax-free until retirement.
- If you are near the £100K mark, a pension contribution can be worth more than the take-home pay you would have received, because it restores your Personal Allowance.
- Use the raise to max your ISA. While this does not reduce current tax, it shelters future returns from tax permanently.
Model your exact raise
Use the income tax calculator twice — once with your current salary and once with the new figure — to see the exact monthly difference. Or try the pre-computed salary pages: £30K, £40K, £50K, £75K, £100K.