Retained raise guide
How Much of a Raise Do You Keep After Tax?
The amount of a raise you keep after tax depends on where the extra income falls in the tax bands and what payroll deductions apply. This guide explains the retained share without pretending one percentage works for everyone.
The figures on this page are planning estimates. They are designed to help interpret salary movement, not replace an employer payslip, HMRC, IRS, payroll software or personal tax advice.
Use a calculator first
This guide explains the decision context. If you need a direct estimate, start with the salary increase calculator, then return to this page to interpret the result.
How to read this page
Estimate old take-home pay, estimate new take-home pay, then subtract. Divide the net increase by the gross raise if you want the retained percentage.
| Step | What to compare | Why it matters |
|---|---|---|
| Current salary | Estimate current take-home pay. | This is the baseline before the raise. |
| New salary | Estimate take-home pay after the increase. | This shows the practical change. |
| Monthly difference | Compare the net monthly gain. | This is usually the number that affects budgeting. |
The simple formula
After-tax raise equals new estimated take-home pay minus current estimated take-home pay. Retained percentage equals after-tax raise divided by gross raise.
Why marginal tax matters
A raise is generally taxed at the rates that apply to the extra income. That is why the retained percentage can be lower at some salary levels.
Why payroll still matters
Pension contributions, salary sacrifice, student loans, FICA, state tax, benefits and withholding choices can all change how much of the raise appears in pay.
Practical examples
| Example | What it shows | Planning takeaway |
|---|---|---|
| Gross raise | New salary minus old salary. | Starting point. |
| Estimated net raise | New take-home pay minus old take-home pay. | What you may keep. |
| Retained percentage | Net raise as a share of gross raise. | Useful but not universal. |
UK and US planning context
| Context | What can affect the increase | Useful route |
|---|---|---|
| UK salary increase | Income Tax, National Insurance, pension contributions, student loans, salary sacrifice and tax code changes. | UK salary after tax |
| US salary increase | Federal tax, FICA, state tax, filing status, benefits, retirement contributions and withholding. | US salary after tax |
| High-income raise | Tax thresholds, phase-outs, state tax and planning choices can make the retained share less intuitive. | Six-figure salary planning |
Related salary increase tools
Authority and planning guides
How Much of a Raise Do You Keep After Tax? FAQ
Do I keep half of my raise?
Not necessarily. The retained share depends on tax bands, payroll deductions and location.
Is a raise taxed at my highest rate?
The additional income may be exposed to your marginal tax rate, but that does not mean all income is taxed at that rate.
Why do two people keep different amounts?
Different tax codes, filing status, state tax, pension choices, benefits and student loans can all change the retained amount.
Where can I calculate it?
Use the raise after tax calculator or salary increase calculator.
Bottom line
A salary increase is most useful when it is translated into after-tax monthly income and then compared with real commitments. Use the calculator or guide as a decision baseline, then check actual payroll details before relying on the result.