A £1 rise in gross pay may not be £1 more take-home pay
Your gross pay rise is what your employer agrees to pay you before deductions. If Income Tax or National Insurance apply to the extra amount, what actually lands in your bank account is smaller than the headline figure, the same way it is for the rest of your salary. If none of the rise is taxed — for example, if your income stays within your tax-free allowances — you can keep the whole amount.
Why the effect differs between people
How much of a rise you keep depends on which part of the Income Tax bands the extra pay falls into, and whether it's within, above, or across the National Insurance thresholds. Someone whose entire rise stays within the basic-rate band generally keeps more of it than someone whose rise pushes part of their income into the higher-rate band above £50,270.00.
If a rise takes your income above £100,000.00, your Personal Allowance also starts to taper down, which can reduce the take-home effect further. See gross pay vs net pay for how the Personal Allowance fits into your overall deductions.
There's no single "you keep X%" rule
Because the effect depends on your starting salary, tax region, pension contributions and any student loan, there's no fixed percentage that applies to everyone's pay rise. Two people getting the same rise can see different take-home increases.
Other things a pay rise can affect
A higher salary can also increase a student loan repayment if it takes you further above your plan's threshold, and a percentage-based pension contribution automatically scales up with your new salary too.
See the effect on your own numbers
The Pay Rise Calculator compares your current and new salary as two full scenarios through WageOra's shared tax engine, rather than applying a flat percentage. See How WageOra Works for how it's calculated. This is an estimate, not personalised tax advice.