You have just been offered a new job. The salary is £42,000 — a solid £6,000 more than your current £36,000. Your first instinct is to say yes. A six-grand raise sounds brilliant, right?
But before you hand in your notice, there is something you should know: a bigger number on your contract does not always mean more money in your pocket. Tax, pension contributions, commute costs, and benefits can all chip away at what seems like a generous pay rise. And unless you sit down and actually do the maths, you could end up worse off — or at least a lot less better off than you expected.
This is not a hypothetical situation. It happens to thousands of people across the UK every year. So let us walk through how to properly compare two job offers, step by step, using real numbers.
Step 1: Work Out the Actual Take-Home Pay
The headline salary is meaningless until you know what lands in your bank account each month. A £42,000 salary does not give you £42,000 to spend. By the time HMRC takes income tax and National Insurance, you are looking at roughly £32,000 in take-home pay — about £2,666 per month.
Compare that to your current £36,000. After tax and NI, that gives you approximately £28,600 take-home — around £2,383 per month.
So the difference in your actual monthly pay is about £283, not £500. That is still nice, but it is a very different story from what the headline numbers suggest.
The easiest way to see this instantly is to run both salaries through our salary calculator. It breaks down income tax, National Insurance, pension deductions, and student loan repayments — everything that sits between your gross salary and your actual take-home pay. You can have both results open in separate tabs and compare them side by side.
Step 2: Factor In the Pension
This is the one that catches most people out. Pension contributions are one of those things that feel invisible until you actually compare them between two employers.
Let us say your current employer matches your pension contributions at 5%. On a £36,000 salary, that means your employer is putting £1,800 a year into your pension on top of your salary. It is essentially free money.
Now, the new employer offers auto-enrolment at the minimum — 3% employer contribution. On £42,000, that is £1,260 per year from them.
That is a difference of £540 a year in employer contributions. Over a 30-year career, with investment growth, that gap compounds to tens of thousands of pounds. A pension match is one of the most valuable benefits an employer can offer, and most people do not even look at it when comparing offers.
Our pension calculator can show you exactly how different contribution rates affect your retirement pot. Plug in both scenarios and the difference will surprise you.
Step 3: Account for the Commute
Your current office is a 20-minute bus ride away. The new one requires driving, with parking. Let us add that up:
- Fuel: roughly £150 per month
- Parking: £80 per month
- Extra wear on your car: maybe £50 per month
- Total: about £280 per month, or £3,360 per year
Remember, commute costs come out of your after-tax income. You cannot claim them as a tax deduction if you are an employee. So that £283 monthly take-home pay difference just got wiped out almost entirely by the commute. You can also check what your mileage costs look like using our mileage calculator.
Step 4: Check If You Are Crossing a Tax Threshold
One of the sneakiest things about a pay rise is that it can push you into a higher tax band. In 2025/26, the basic rate band runs from £12,571 to £50,270. If the new role offered £52,000 instead of £42,000, everything above £50,270 would be taxed at 40% instead of 20%.
At £42,000, you are safely within the basic rate band. But it is still worth thinking about. If the new employer offers annual bonuses, those get added to your taxable income too. A £5,000 bonus on top of a £48,000 salary means part of that bonus is taxed at 40%. Our bonus tax calculator shows exactly how much of a bonus you will actually keep.
And if you are hovering near the £50,270 threshold, extra pension contributions can pull your taxable income back below it. That is a perfectly legal, very effective planning tool.
Step 5: Consider the Benefits You Are Giving Up
Beyond pension, there are other benefits that have a real cash value:
- Private health insurance — worth £1,000-£2,000 a year if you had to buy it yourself
- Extra holiday days — if your current job gives you 28 days and the new one gives 25, those three days have a monetary value (roughly your daily rate times three)
- Flexible working — being able to work from home saves commuting costs, and time has value too
- Salary sacrifice schemes — cycle-to-work, childcare vouchers, electric car leasing — these save you tax and NI
- Training budget — professional development is an investment in your future earnings
None of these show up in the headline salary, but they all affect the total value of the package.
Step 6: Do the Full Comparison
Let us put it all together for our £36,000 vs £42,000 example:
- Extra take-home pay per year: roughly £3,400
- Lost employer pension contribution: -£540
- Extra commuting costs: -£3,360
- Net benefit of the "£6,000 raise": roughly -£500
That six-thousand-pound pay rise is actually costing you money. Not a lot, but enough to make you think twice.
Now, this does not mean you should never take a job with a longer commute or a smaller pension match. There are plenty of reasons to change jobs — career growth, better culture, more interesting work, a terrible boss. But you should go in with your eyes open, knowing exactly what the numbers look like.
How to Negotiate Using Real Numbers
Here is the powerful part. Once you have the numbers, you have leverage.
Instead of just accepting the offer, you can go back and say: "I have run the numbers, and once I account for pension and commuting, the effective value of this move is actually quite small. Would you consider matching my current employer's 5% pension contribution, or moving the salary to £44,000?"
Most hiring managers have never had a candidate come back with a clear, numbers-based case. It shows you are thoughtful, financially literate, and serious about the role. More often than not, they will meet you somewhere in the middle.
Our salary comparison calculator is perfect for this. Run both offers with all the variables — pension, student loan, overtime — and you get a clear picture of what each job is actually worth to you.
The Bottom Line
A pay rise is not just a bigger number. It is the combination of take-home pay, pension, benefits, commute costs, and tax efficiency. The only way to properly compare two jobs is to look at the full picture — and that means running the numbers.
Take five minutes. Put your current salary and the new offer into our salary calculator. Check the pension impact. Look at the National Insurance breakdown. And then make your decision based on facts, not feelings.
You might find that the pay rise is everything you hoped for. Or you might find that staying put — or negotiating harder — is the smarter move. Either way, you will know. And knowing is worth more than guessing.