A 5% pay rise increases a £40,000 salary to £42,000. Under the default 2026/27 assumptions, estimated take-home increases by £1,440.00 per year, or £120.00 per month.
2026/27 · England / Wales / NI · 1257L · monthly payroll · no pension, salary sacrifice, loans, benefits or bonus. Full-year salary comparison. Change the assumptions below.
These are the pre-calculated reference figures. Your customised result above may differ.
| Calculation | Amount |
|---|---|
| Current annual salary | £40,000.00 |
| New annual salary | £42,000.00 |
| Gross annual increase | £2,000.00 |
| Gross monthly increase | £166.67 |
| Additional annual take-home | £1,440.00 |
| Additional monthly take-home | £120.00 |
| Additional Income Tax | £400.00 |
| Additional employee NI | £160.00 |
| Gross increase retained | 72.0% |
| Headline pay rise | 5.0% |
| Annual take-home increase | 4.5% |
This pay rise does not add a new Income Tax band. The amount retained still depends on deductions and any Personal Allowance change.
With Scottish Income Tax and the same other defaults, this rise adds £118.33 monthly take-home. With Plan 2 instead of no loan under England / Wales / NI defaults, it adds £105.00 a month, including £180.00 additional annual student-loan repayment. Select your own settings above; repayments are not Income Tax.
Both salaries go through the same tax engine. The difference in take-home is the pay rise’s cash value. Income Tax, employee NI, pension and loan changes are shown separately. A higher band applies to income in that band, not automatically to the whole salary. GOV.UK Income Tax guidance.
Percentage contributions scale with each salary; fixed annual gross contributions stay fixed. Salary sacrifice, net pay and relief at source are distinct methods. Pension growth is not cash take-home. Loan repayments may rise or start as earnings increase. Select the method and plan that apply to you. Pension tax relief · Loan repayments.
Use your own inflation rate for the same period as the salary change. Real gross-pay growth is calculated as (new salary ÷ current salary) ÷ (1 + inflation rate) − 1. It is a simplified purchasing-power comparison, not a household budget, inflation forecast or net-pay real-terms calculation.
This compares a full year at each salary, excluding bonuses and extra-hours changes; it does not forecast a mid-year rise, cumulative PAYE or the first new payslip. Fixed benefits/deductions are held unchanged. Monthly and weekly figures are annual equivalents. Historical blended-NI years are estimates. Pension allowances, minimum wage, employer NI sharing, loan balances/refunds and other Self Assessment income are not assessed. Extra relief-at-source claims may arrive later. Non-standard codes are PAYE estimates, separate from statutory allowance information. Educational estimates, not personalised financial advice.
Calculation methodology · One-off bonus calculator · Salary sacrifice calculator · Monthly and annual take-home targets