Is a £5,000 pay rise worth it after tax?
Yes — but it is smaller than it sounds. Here is exactly what £5,000 more becomes once income tax, National Insurance, a student loan and your pension have taken their share.
The short answer
For a typical graduate — Plan 2 student loan, 5% pension on a standard (net pay) arrangement — a rise from £45,000 to £50,000 keeps £2,950 a year, about £246 a month: 59p of every extra pound.
On £45,000
Plan 2 loan · 5% pension, net pay
On £50,000
same loan, same pension — £5,000 more gross
Of the £5,000: £950 more income tax, £400 more NI, £450 more student loan — and £250 more into your own pension, which is deferred pay, not a loss. Without a Plan 2 loan the same rise keeps £3,400 a year — 68p in the pound; the 9% deduction is the difference people most often forget.
Where the other 41% goes
Between £12,570 and £50,270, each extra pound of salary loses 20p to income tax and 8p to employee National Insurance. Add 9p of Plan 2 repayment above its threshold, and 5p into your pension — which is not lost, it is deferred pay that usually arrives with employer money attached — and the arithmetic lands almost exactly on the 59% you keep.
Cross £50,270 and the picture changes: income tax steps up to 40% while NI drops to 2%, so the marginal keep-rate on a rise straddling the higher-rate threshold is a blend. This is why two people comparing the same £5k rise can keep noticeably different amounts.
When a £5,000 rise is not worth it
A rise attached to a longer commute can cost more than it pays — our commute guide works through a real example where an £8,000 rise leaves the hourly rate lower. A rise that pushes past £100,000 meets the 60% taper zone. And a rise paired with a weaker pension match can be a net loss over five years — see what an employer match is worth.
Most often, though, the catch is not financial at all: the £246 a month arrives with on-call, evening work, or a manager you have a bad feeling about. £2,950 is the price the rise pays — whether it is worth the stress is a different question, which is why the calculator scores wellbeing, hours and flexibility on their own axis and asks what a meaningful rise is worth to you before combining the two.
The honest way to judge any rise is take-home per committed hour, not gross salary. That is what the calculator computes — the full method is on the methodology page.
Run this scenario with your own numbers
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