1. What is the Pay Increase Calculator?

The Pay Increase Calculator helps determine your new salary after a percentage increase, which is particularly useful for understanding changes in your UK tax obligations when receiving a pay rise.

2. How Does the Calculator Work?

The calculator uses the simple pay increase formula:

Where:

• Old Pay — Current salary before increase (GBP)
• Rate — Percentage increase being applied (%)

Explanation: The formula calculates the new salary by applying the percentage increase to the original salary amount.

3. Importance for UK Tax Purposes

Details: Understanding your new pay amount helps anticipate potential changes in your UK tax bracket, National Insurance contributions, and other payroll deductions.

4. Using the Calculator

Tips: Enter your current salary in GBP and the percentage increase. The calculator will show your new gross pay amount before tax deductions.

5. Frequently Asked Questions (FAQ)

Q1: Does this show my take-home pay after tax?
A: No, this calculates gross pay only. For net pay, you'll need to consider UK tax brackets and NI contributions.

Q2: How does a pay rise affect my tax code?
A: Significant pay increases may move you into a higher tax bracket, potentially changing your tax code.

Q3: Should I include bonuses in the old pay amount?
A: For permanent salary increases, use your basic salary. For bonus calculations, use the bonus amount as old pay.

Q4: What if my pay increase is not a percentage?
A: For fixed amount increases, simply add the amount to your old pay without using this calculator.

Q5: How often can I use this calculator?
A: You can use it whenever you're considering or have been offered a pay increase to understand the financial implications.