Two-Year Salary Comparison
Our two-year salary comparison calculator shows how a salary change — a pay rise, a promotion, a job change, or a reduction in hours — affects your take-home pay between any two income levels, applying the correct 2026/27 income tax and National Insurance rates to both. It removes the ambiguity from salary decisions by showing real net differences, not gross.
2025/26 vs 2026/27 Tax Comparison
Compare your take-home pay between the 2025/26 and 2026/27 tax years.
Why Gross Pay Differences Are Misleading
A pay rise from £35,000 to £40,000 sounds like a £5,000 improvement. After tax and NI, the actual increase in monthly take-home is approximately £272 — not the £417 per month the gross figure implies. The marginal rate on earnings in the basic rate band is 28% (20% tax + 8% NI), meaning you keep only 72p of each additional pound in this range. Above £50,270 the marginal rate rises to 42%, leaving just 58p per pound.
Understanding this is critical when evaluating a job offer, deciding whether to negotiate harder, or weighing a higher-paying role with worse benefits against a lower salary with better pension, more holiday, or flexible working. A £5,000 gross increase only adds £3,600 take-home — but so does a £3,600 improvement in employer pension contributions, without any tax cost at all.
The Cost of a Pay Rise Near Key Thresholds
Near the £50,270 threshold, a pay rise that crosses the boundary creates a notch effect. The portion above £50,270 is taxed at 40% rather than 20%, and NI drops from 8% to 2%. The combined effect is that the marginal take-home rate on income just above £50,270 is actually higher than just below it — the NI saving partially offsets the income tax increase. Our calculator shows this effect clearly, highlighting when a salary just above a threshold may be worth less net than one just below, once pension strategy is considered.
Frequently Asked Questions
At a basic rate salary (below £50,270), a £5,000 gross pay rise adds approximately £3,600 per year net — £300 per month. At a higher rate salary (above £50,270), the same £5,000 rise adds approximately £2,900 per year net — £242 per month. Higher rate tax costs you an extra £100 per month compared with the basic rate equivalent.
A company car has a taxable benefit in kind value, not a cash value. A £30,000 petrol car with 120g/km CO2 costs a basic rate taxpayer approximately £1,500 per year in additional income tax (25% BIK rate × £30,000 × 20%). Compare this to the cost of buying the same car privately. Our Taxable Benefits Calculator shows the full BIK cost for any company car.
If a pay rise takes your income above £60,000, you (or your partner) will face the High Income Child Benefit Charge. Above £80,000, the full benefit is clawed back through self-assessment. This effectively creates marginal rates above 60% for families with children in certain income ranges.
When you leave a job, your employer issues a P45 showing your earnings and tax paid year to date. Your new employer uses this to issue the correct tax code. Without a P45, an emergency tax code (often 1257L W1/M1) applies, which may under or over-collect tax.
Yes — enter your pension percentage for each scenario. A higher pension contribution reduces taxable pay, lowering both income tax and NI. Use our Salary Sacrifice Calculator to isolate the pension contribution effect, and our Take-Home Pay Calculator for the combined view.
Enter two salary levels for the same person to compare scenarios — for example, your pre-promotion salary versus a proposed new salary after a pay review, or two job offers from different companies. Unlike the two-salaries comparison which assumes these are alternative single incomes, this tool can model combined scenarios. The side-by-side breakdown shows income tax, NI, and take-home for each, with the difference highlighted. Scotland rates apply to both columns when selected. Use the result to build a factual case for a pay increase — showing a manager the exact net difference demonstrates you have done your homework rather than simply asking for more.
Important Information
This calculator is provided for general information and planning purposes only. It does not constitute financial or tax advice and should not be relied upon as such. Figures are indicative estimates based on simplified, publicly available criteria and stated assumptions. Actual results depend on your full circumstances. See our Disclaimer for further information.