1. What is the Wage Increase Calculator?

This calculator helps determine your new wage after a percentage increase, which is particularly useful for UK tax planning and understanding how pay rises affect your take-home pay.

2. How Does the Calculator Work?

The calculator uses the following simple formula:

Where:

• Old Wage — Your current salary before the increase (GBP)
• Rate — The percentage increase being applied (%)

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

3. Importance for UK Tax Purposes

Details: Understanding your new wage helps with tax planning as moving into higher tax brackets can affect your net income. In the UK, different income thresholds determine which tax band you fall into.

4. Using the Calculator

Tips: Enter your current wage in GBP and the percentage increase. The calculator will show your new annual wage before tax deductions.

5. Frequently Asked Questions (FAQ)

Q1: Does this show my take-home pay after tax?
A: No, this shows gross pay before tax. For net pay, you'll need to account for UK income tax, National Insurance, and other deductions.

Q2: How do UK tax brackets affect my pay rise?
A: If your new wage crosses into a higher tax bracket (e.g., from Basic Rate to Higher Rate), you'll pay more tax on the amount above the threshold.

Q3: Should I include bonuses in the old wage?
A: This calculator is for base salary. For comprehensive calculations including bonuses, use a dedicated UK tax calculator.

Q4: What about National Insurance contributions?
A: NI contributions also increase with wage rises, with different thresholds than income tax.

Q5: How often should I recalculate after a pay rise?
A: Recalculate whenever your salary changes to understand the impact on your finances and tax position.