Pay Rise Calculator

As a starting point, a pay rise that at least keeps pace with inflation maintains your real purchasing power. In the UK, inflation has varied significantly in recent years. Beyond inflation, consider your market value, any increased responsibilities, and your employer's financial position. Researching salary benchmarks for your role through job boards and industry surveys gives you evidence to support a specific request, which is more persuasive than a general appeal.

In the UK, income tax works on a marginal basis — only the portion of your income above a threshold is taxed at the higher rate. Moving into a higher band does not mean your entire salary is taxed at the new rate. However, if your income crosses £100,000, your personal allowance begins to taper (losing £1 of allowance for every £2 earned above £100,000), creating an effective 60% marginal tax rate on income between £100,000 and £125,140.

A pay rise is a permanent increase to your base salary, which also raises your future bonus targets, pension contributions (in salary-linked schemes), and statutory entitlements like maternity or paternity pay. A bonus is typically a one-off payment that does not increase your ongoing salary. When negotiating, a pay rise is generally more valuable in the long run than a bonus of the same amount.

Effective pay rise negotiation in the UK typically involves timing your request well (after a success or during a scheduled review), researching your market rate using salary surveys and job adverts, documenting your achievements and the value you have added, and making a specific, evidence-backed ask. It helps to frame the conversation around your contribution and the market rate rather than personal financial need. Be prepared for a counter-offer and know your minimum acceptable outcome in advance.