Your situation
£0£200k
True marginal rate on your next £1
0%
Income tax + NI + relevant clawbacks + student loan
£0Take-home from your next £1 of earnings
—Tax band you're sitting in
£0What you'd keep from a £1,000 pay rise
Marginal rate across the income curve
Marginal rate (%)
How the rate is built up
| Component | Contribution to your marginal rate |
|---|
What this means in practice
Your marginal rate is the most actionable number in personal finance. It tells you:
- How much of a pay rise you actually keep (take the headline figure × (1 − marginal rate))
- How much a pension salary-sacrifice contribution is "worth" — sacrificing £1 saves you marginal-rate × £1
- Whether a Gift Aid donation is meaningfully cheaper for a higher-rate taxpayer than a basic-rate one
- Whether to try to push a one-off bonus into pension to avoid temporarily entering a higher band
The four UK marginal-rate "spikes" that catch people out
- £60,000-£80,000 for households claiming Child Benefit — HICBC clawback adds an effective 5-15% on top of normal marginal rate, scaling with the number of children.
- £100,000-£125,140 — the 60% tax trap from Personal Allowance taper (62% with NI; 67% Scotland).
- Above £100,000 — losing Tax-Free Childcare and 30 hours childcare for any household with young children. Often >100% marginal cost on the £1 that crosses the threshold.
- Above £125,140 — additional rate (45% / 48% Scotland) but no further clawbacks; counter-intuitively, the marginal rate falls from the 60% trap into the 47% additional rate band.
Tax-saving tip — find your nearest "cliff"
Plan with marginal rate, not average rate
If you're earning £62,000 and your marginal rate is 51% (40% income tax + 2% NI + 9% Plan 2 student loan), then a £5,000 pension salary sacrifice has a true cost to take-home of £2,450 (£5,000 × 49%), not £4,000. The same calculation done with average tax rate (~26% at this income) gives a misleading "cost" of £3,700. Always model trade-offs at marginal rate.
Related calculators
Full tax calculator · Salary sacrifice calculator · Bonus and pay-rise calculator · 60% tax trap guide · HICBC calculator · Student loan calculator