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A job offer is quoted as a salary, and the salary is before tax, before National Insurance and before everything it costs you to turn up. The two offers comparison on this site handles the first two. The third is on you, and it is where a rise of a few thousand pounds can shrink to a few hundred. This article works through an example so you can do the same with your own figures.
Step one: what the extra pay is worth after tax
A rise is taxed at your marginal rate, which is the rate on the top slice of your pay, not your average rate. For 2026/27, in England, Wales and Northern Ireland, income between £12,571 and £50,270 is taxed at 20%, and income above £50,270 at 40%. Employee National Insurance on the same slices is 8% up to £50,270 and 2% above it.
Say you earn £32,000 now and the new job pays £35,000, so the gross difference is £3,000. Both salaries sit in the basic rate band, so the tax is 20% and the National Insurance 8%. That is 28p of every extra pound gone, and the rise leaves you:
- £3,000 less £600 income tax and £240 National Insurance = £2,160 a year, or £180 a month.
Where the new salary crosses £50,270, the part above it is taxed at 40% and 2%, so you keep 58p of each extra pound on that slice. If you repay a student loan, 9% of the earnings above your plan's threshold comes off as well. The threshold is £26,900 on Plan 1, £29,385 on Plan 2, £33,795 on Plan 4 and £25,000 on Plan 5, and for a postgraduate loan it is £21,000 at 6%.
In Scotland, the bands are different. The 2026/27 rates there are 19% from £12,571, 20% from £16,538, 21% from £29,527, 42% from £43,663, 45% from £75,001 and 48% above £125,140. The same £3,000 would be taxed at 21%, not 20%, in the middle band, so check the Scottish bands against your own figures rather than reusing the example.
Step two: the pension difference
A pension is part of the offer. The legal minimum under automatic enrolment is 5% from you and 3% from your employer, 8% in total, worked out on earnings between £6,240 and £50,270 a year before tax. Some schemes pay more than the minimum. Two offers with the same salary can differ by a few hundred pounds a year in what goes into your pension.
That money is real, but it does not arrive in your bank account, so the useful way to look at it is as a separate line. Take-home pay shows what you can spend now, and the pension shows what is being built for later. A job that pays less in your hand and more into the pension is not worse or better by default. It depends on which of those you need now.
Step three: what getting there costs
Ordinary travel to a permanent workplace is not something an employee can reduce their tax bill by. GOV.UK says you cannot claim for travelling to and from work, unless you are travelling to a temporary place of work. So the cost of the commute comes out of your net pay in full.
Take an example, and treat all of it as an example: the new job is further away, adding £5 a day in fares and parking, and you are in the office four days a week for 46 weeks of the year. That is 184 days. Add £4 a day for a lunch you would otherwise have made at home. The extra daily cost is £9, and over 184 days it comes to £1,656 a year, or £138 a month.
Now put the two numbers together:
- Extra take-home from the rise: £180 a month.
- Extra daily cost of the new job: £138 a month.
- What is left: £42 a month, or £504 a year.
The headline rise was £3,000 and it ended up as £504. The new job might still be right, because of the work, the progression, a better pension or fewer hours, but the cash gain is much smaller than the figure on the offer letter.
Your own version of this needs three inputs: the fare or fuel for the extra distance, any change in days in the office, and the daily costs that come with the new setting. Leave out anything that does not change. If you drive the same distance, the cost is the same.
Where the daily cost can be brought down
Some of the daily costs are choices. A few categories of product reduce them, and none of them is essential.
- Lunch. The £4 in the example is a buy-it-there lunch. A Ad leakproof lunch box costs a one-off amount and means the lunch is made at home. For hot food, an Ad insulated food flask does the same job.
- Drinks. A Ad reusable insulated bottle covers water. Tea or coffee made at home goes in a Ad travel mug with a lid.
- Carrying it all. A Ad commuter rucksack with a laptop sleeve holds the lunch and the bottle without needing a separate bag.
Check the practical details: whether the lunch box is microwave safe if your workplace has one, and whether the flask's opening is wide enough to eat from.
A short checklist for the next offer
- Work out the net difference with the calculator, using the same pension basis on both offers.
- Work out the daily cost of the new job in fares or fuel, and what changes in days in the office.
- Deduct the second from the first, and divide by the number of days you will actually go in to get a figure for a single day.
- Look at the pension and any other benefits as separate lines.
If the answer is a gain of a few pounds a month, the decision is about the job. If it is a loss, the offer needs to say what it makes up for.