Why Net Pay Differences Don't Match Gross Differences
UK Income Tax is progressive — additional earnings are taxed at a higher marginal rate as you move up the income scale. A £5,000 pay rise within the Basic Rate band (20%) provides approximately £4,000 extra take-home after tax and NI. To calculate a single salary in detail, check out our comprehensive tax calculator. However, the same £5,000 rise crossing from £50,270 into the Higher Rate band (40%) only yields approximately £2,900 extra.
The £100,000 Personal Allowance Trap
Earning between £100,000 and £125,140 triggers an effective 60% marginal tax rate. For every £2 earned above £100,000, you lose £1 of your Personal Allowance — combined with the 40% Higher Rate and 2% NI, this creates a brutal 60% effective rate. This tool clearly visualises this impact when comparing salaries in this range.
Total Compensation vs Salary
When comparing two job offers, consider the complete package: employer pension contributions, private health insurance, annual leave, bonuses, share options, and flexible working benefits all add significant value beyond the headline gross salary figure.
Salary Comparison FAQs
How much extra take-home pay will I get from a pay rise?
Enter your current salary and the offered salary in this comparison tool. The difference in take-home pay shown is exactly how much extra you will receive per month after Income Tax and National Insurance deductions.
Does a higher salary always mean significantly more take-home pay?
Not always proportionally. As your salary increases into the Higher Rate tax band (above £50,270 taxable income), you pay 40% Income Tax on the additional earnings rather than 20%. This means a £10,000 pay rise in the Basic Rate band yields approximately £6,800 extra per year, but the same rise in the Higher Rate band only yields approximately £5,800.
How does moving from £50,000 to £60,000 affect my take-home pay?
Moving from £50,000 to £60,000 gross pushes approximately £10,000 of earnings from the Basic Rate (20%) into the Higher Rate (40%) band. After factoring in NI, you would receive approximately £5,400–£6,000 extra per year — not the full £10,000 difference.
