How to use the What If? tool
Start by entering your current salary, then customise each scenario card. Mix and match — for example, Scenario A could be a £5,000 pay rise, B could be putting that same amount into your pension, and C could be starting a side hustle to earn an extra £5,000. You'll instantly see which option leaves you better off after tax.
The tool uses HMRC 2026/27 rates including Income Tax bands, Employee National Insurance, and Class 4 NI for self-employment income. Pension contributions use the salary sacrifice method (reducing gross salary before tax).
Frequently asked questions
Is it better to take a pay rise or increase pension contributions?
It depends on your tax rate. A higher rate taxpayer gets 40% relief on pension contributions — a £5,000 pension increase only costs £3,000 net. But a pay rise gives you liquid cash now. The best choice depends on your age, existing pension pot, and cash flow needs. Use the tool above to compare both with your exact numbers.
How much of a pay rise do I actually keep after tax?
For a basic rate taxpayer, roughly 72p in every £1 of a pay rise reaches your pocket (20% tax + 8% NI). For higher rate taxpayers it drops to around 58p (40% tax + 2% NI). If a rise takes you over £100,000 the effective marginal rate hits 60% due to Personal Allowance tapering.
Does starting a side hustle affect my PAYE tax?
Yes — side hustle profits are added to your salary and taxed at your marginal rate. You also pay Class 4 NI on profits over £12,570. However, you can deduct legitimate business expenses (equipment, software, home office, mileage) before calculating the profit.
What is salary sacrifice and how does it save tax?
Salary sacrifice reduces your gross salary before tax is calculated — so you save both Income Tax and National Insurance. A personal pension contribution only gives you tax relief (no NI saving). Salary sacrifice is typically used for pensions, electric cars, and childcare. Both you and your employer save NI.