What is your pay rise really worth? The cliff-edge check

How this calculator works

You enter your current salary, the rise or bonus, where you live (the tool applies Scottish rates if you select Scotland), your student loan plan, how many children you claim Child Benefit for, and whether you use Tax-Free Childcare or funded hours. The tool then works out your position before and after the rise, including Income Tax, National Insurance, student loan, the High Income Child Benefit Charge and the Personal Allowance taper, and shows what you actually keep from the rise as a percentage. Where the rise crosses one of the cliff edges, it also calculates the exact pension contribution that would take you back under the threshold, so you walk away with a specific number to give payroll rather than a vague worry.

The marginal rate stack, in numbers

Your marginal rate is what you lose from the next pound, and it is nothing like the headline tax bands once the clawbacks are stacked on top. Here is the 2026/27 picture for an employee in England with two children and a Plan 2 student loan:

The Child Benefit figure works like this: two children pay £2,337.40 a year (£27.05 plus £17.90 a week), and the charge removes 1% of it for every £200 of adjusted net income between £60,000 and £80,000. Spreading £2,337.40 over that £20,000 zone is an extra 11.7 pence per pound; with one child it is about 7 pence, with three about 16.3 pence. The taper zone above £100,000 works differently: losing £1 of Personal Allowance for every £2 of income means each pound in that band effectively suffers 60% Income Tax before NI and student loan are added.

A worked example: the £8,000 rise that pays £3,219

Priya earns £58,000, has two children and a Plan 2 loan, and is offered a rise to £66,000. On the £8,000: Income Tax at 40% takes £3,200, National Insurance at 2% takes £160, and the student loan at 9% takes £720. The rise also carries her £6,000 into the Child Benefit zone, triggering a charge of 30% of the family's £2,337.40, which is £701.22. Total cost £4,781.22, so she keeps £3,218.78 of the £8,000: a 60% effective rate on money the headline tables call 40% income.

Now the fix. Priya asks payroll to salary-sacrifice £6,000 of the rise into her pension, taking her taxable pay to £60,000. The Child Benefit charge disappears entirely, and the £2,000 she takes as cash keeps 49% after tax, NI and loan, £980. Compare the two worlds: taking the full rise as cash gave her £3,218.78; the pension route gives her £980 in cash plus £6,000 in her pension. She has given up £2,238.78 of net pay to gain £6,000 of pension, which means each £1 of pension cost her about 37p. There is no other savings product in the UK where a 63% marginal-rate earner gets that deal, and the calculator above computes the equivalent number for your own rise.

The £100,000 cliff is different: it is not a taper

Everything else in the stack takes a slice of each extra pound. The childcare cliff at £100,000 is binary: the moment either parent's adjusted net income passes £100,000, Tax-Free Childcare (worth up to £2,000 per child per year) and, in England, the funded hours for working parents both stop completely. There is no phase-out. A parent on £99,500 with two nursery-age children can accept a £2,000 bonus and lose considerably more in childcare support than the bonus pays, which is the one genuine case in the UK system where a rise leaves you worse off in cash. If you are anywhere near this line, run the Tax-Free Childcare calculator to price what is at stake and the 60% tax trap calculator for the allowance taper on top.

Scotland: the same cliffs, a higher stack

The clawbacks in this tool are UK-wide, because Child Benefit, the childcare schemes and the Personal Allowance taper are not devolved. What changes in Scotland is the Income Tax underneath them. Scottish earners pay 42% higher rate from £43,662 of total income, 45% advanced rate from £75,000, and the taper zone above £100,000 lands in the advanced band, pushing the effective rate there to roughly 67.5% before NI and student loan. A Scottish parent with two children and a Plan 4 loan can face around 65% between £60,000 and £75,000 and well over 75% just above £100,000. The calculator applies the correct Scottish bands automatically when you select Scotland, and the pension fix works identically on both sides of the border because pension relief and adjusted net income are UK-wide concepts.

Common mistakes near the cliff edges

• Turning down the rise. Almost never the right answer. Between £60,000 and £125,140 you still keep 29p to 49p of each pound even at the worst points, and pension contributions can rescue most of the rest. The exception is the childcare cliff, where timing and pensions matter enormously.
• Forgetting that bonuses count. Adjusted net income includes bonuses, taxable benefits like a company car, savings interest and rental profit. A December bonus can quietly push you over £60,000 or £100,000 even when your salary sits below it.
• Fixing it after the tax year ends. Salary sacrifice only works on pay you have not yet received. A personal pension contribution before 5 April can still repair the same year's adjusted net income, but after 5 April the year is closed.
• Confusing the thresholds. The Child Benefit charge tests £60,000 to £80,000; childcare and the allowance taper test £100,000. Each is per-parent, not per-household, so a couple on £59,000 each keeps everything while a single earner on £101,000 loses the lot.
• Ignoring the household angle. Which parent's income crosses the line matters. If one of you is at £98,000 and the other at £60,000, the right person taking the pension contribution protects far more support. The Child Benefit tax calculator shows the charge for whoever is the higher earner.

What to do next

1. Run your rise through the calculator above and note the keep-rate and the suggested pension figure.
2. Before the new salary is first paid, ask payroll whether the excess over the relevant threshold can go into your pension by salary sacrifice. Most payroll teams process this routinely, and it also saves NI.
3. No sacrifice scheme? Make a personal pension contribution before 5 April instead: the provider adds basic-rate relief automatically and you claim the higher-rate portion through Self Assessment. The salary sacrifice calculator compares the two routes.
4. After the rise lands, check your first payslip against the take-home pay calculator, because new salaries are a classic trigger for wrong tax codes.

This page is an estimate and general guidance, not financial advice; confirm thresholds and your own figures on GOV.UK before making pension or pay decisions.

Who should use this calculator

Some pay rises are worth far less than they look, and a few leave you barely better off. This shows what you actually keep from a rise once tax, National Insurance and student loan are taken — and flags the income bands where the effective rate spikes.

The worst of these is between £100,000 and £125,140, where the Personal Allowance is withdrawn at £1 for every £2 earned. The effective marginal rate there is around 60%, so a £5,000 rise can net under £2,000. Sacrificing the rise into a pension often leaves you better off overall.

What this calculator assumes

• The rise is added to your current salary and taxed at the resulting marginal rate.
• Income Tax, National Insurance and student loan repayments are all applied to the increase.
• The Personal Allowance taper above £100,000 is modelled, since it is the main cause of the trap.
• Selecting Scotland applies Scottish bands, which create their own boundaries.

Limitations — what it does not cover

• The Child Benefit charge, which creates a separate high effective rate between £60,000 and £80,000 for households claiming it.
• Benefit tapers. Universal Credit withdraws 55p per extra pound of net earnings.
• Childcare support cliffs, including tax-free childcare and funded hours, which stop entirely above a threshold rather than tapering.
• Pension sacrifice as a remedy, which is usually the answer but needs your employer to offer it.
• The tapered annual allowance, which restricts how much high earners can sacrifice.
• Non-salary consequences of a higher headline salary, such as mortgage borrowing.