Compare Two Salaries
A bigger salary is not always as much bigger as it looks. Compare two offers on what actually reaches your account.
Difference in take-home pay
+£420 a month
| Salary A | Salary B | Difference | |
|---|---|---|---|
| Gross salary | £35,000 | £42,000 | £7,000 |
| Income Tax | £4,486 | £5,886 | £1,400 |
| National Insurance | £1,794 | £2,354 | £560 |
| Effective rate | 17.9% | 19.6% | |
| Take-home a year | £28,720 | £33,760 | £5,040 |
| Take-home a month | £2,393 | £2,813 | £420 |
Why the gross difference is not the real difference
A £7,000 rise sounds like £583 a month. After basic-rate tax and National Insurance it is closer to £420 — and if the increase pushes you across the higher-rate threshold at £50,270, the portion above it is taxed at 42% including National Insurance rather than 28%.
The thresholds worth knowing: £50,270, where the higher rate starts; £60,000, where the High Income Child Benefit Charge begins if anyone in your household claims it; and £100,000, where the personal allowance starts to disappear and the marginal rate jumps to 62%.
What the salary figure leaves out
Take-home pay is only part of an offer. An employer pension contribution of 10% against 3% is worth more than most pay rises and never appears in the salary line. So are the things that come out of net pay if you have to buy them yourself: a season ticket, parking, private medical cover, childcare.
Common questions
How much of a pay rise do I actually keep?
A basic-rate taxpayer keeps 72p in the pound, or 63p with a student loan. A higher-rate taxpayer keeps 58p, or 49p with a student loan. Between £100,000 and £125,140 you keep 38p.
Is a pay rise worth it if it pushes me into the higher rate?
Yes — only the part above £50,270 is taxed at the higher rate, so you always end up with more money. The only genuine cliff edges in the UK system are the £100,000 allowance taper and benefit-related thresholds, not the higher-rate band itself.
Should I compare gross or net when choosing a job?
Net, then adjust for everything that does not appear in either figure — employer pension contribution, bonus, commute cost, and whether benefits are paid from gross or net pay.