Why a Pay Rise Is Worth Less Than It Looks
When you receive a pay rise, you don't keep all of the additional income. Income tax and National Insurance take a chunk. For a basic rate taxpayer, 20% goes to income tax and 8% to NI — meaning you keep about 72% of the extra pay.
How to Negotiate a Pay Rise
Research the market rate for your role using salary surveys and job listings. Document your achievements and added value. Request a meeting formally and come prepared with specific figures. Be ready to discuss a timeline if an immediate rise isn't possible.
Real Pay Rises vs Inflation
A pay rise below the rate of inflation is effectively a real-terms pay cut. With UK inflation at approximately 2.8% in 2025, any pay rise below this means your purchasing power is declining. Use our Inflation Calculator to understand the real value of your wages over time.
Non-Salary Benefits to Consider
When evaluating a compensation package, consider pension contributions, private healthcare, flexible working, professional development budget, share schemes and other benefits that may not appear in the salary figure but have real monetary value.