Will a raise put you in a higher tax bracket?
Short answer
Part of it might, but only the part above the bracket line is taxed at the higher rate, so moving into a new bracket can't by itself leave you with less money. The surprises come from allowances, credits and charges that shrink as income rises, such as the UK's £100,000 personal allowance taper and the US earned income tax credit.
In 2026 a single filer in the US pays the 22% federal rate only on taxable income above US$50,400. A raise that lifts taxable income to $52,900 is taxed at 22% on the top $2,500, and every dollar below the line keeps the rate it had before. UK brackets work the same way.
What a raise across a bracket line costs
Take Marisol, a hypothetical single filer earning $64,000 who gets a $5,000 raise. With the 2026 standard deduction of $16,100 (IRS Revenue Procedure 2025-32), her taxable income goes from $47,900 to $52,900, and since the 12% bracket ends at $50,400, half the raise is taxed at 12% and half at 22%.
| Before the raise | After the raise | Change | |
|---|---|---|---|
| Salary | $64,000 | $69,000 | +$5,000 |
| Taxable income | $47,900 | $52,900 | +$5,000 |
| Federal income tax | $5,500 | $6,350 | +$850 |
| Social Security and Medicare (7.65%) | $4,896 | $5,278.50 | +$382.50 |
| Left after these taxes | $53,604 | $57,371.50 | +$3,767.50 |
| Average federal income tax rate | 8.6% | 9.2% | +0.6 points |
The extra $850 is $300 at 12% plus $550 at 22%. She keeps $3,767.50 of the raise, or 75%, and the tax on her first $64,000 doesn’t change. Payroll tax is 7.65% on both sides of the line (IRS Topic 751); the Social Security part only stops at the $184,500 wage base.
The worry about brackets assumes the new rate applies to all of your income. If it did, Marisol’s federal tax would jump from $5,748 (12% of $47,900) to $11,638 (22% of $52,900), and the raise would cost $890 more than it paid, before payroll tax. Brackets don’t work that way in the US or the UK; each rate applies only to the income inside its band.
Marginal rate and average rate
Marisol’s marginal rate, the rate on her next dollar, is now 22% federal income tax plus 7.65% payroll tax: 29.65 cents of each extra dollar. Her average federal income tax rate (income tax ÷ salary) only moves from 8.6% to 9.2%. The marginal rate is the one that tells you what overtime, a bonus or a pension contribution is worth; the average rate tells you what share of the whole salary goes in tax.
These are 2026 figures. The IRS hadn’t published the 2027 brackets when we checked its newsroom on 15 October 2026, and the 2026 brackets came out on 9 October 2025. We’ll update this guide when the 2027 ones are out.
In England, Wales and Northern Ireland, a raise from £48,000 to £52,000 in 2026/27 is taxed at 20% up to £50,270 and at 40% above it (GOV.UK), while employee National Insurance drops from 8% to 2% at the same line. The marginal rate goes from 28% to 42%, and only on the £1,730 above £50,270. Scroll’s Tax lessons cover brackets in your own country’s terms.
When a raise costs more than the bracket rate
No bracket rate comes close to 100%. Moving up a bracket can’t by itself leave you with less, but rules that withdraw an allowance, a credit or a benefit as income rises can push the rate on extra pay well above the bracket. Each one works inside a band of income, and a few create a cliff where help stops all at once.
The UK’s £100,000 personal allowance taper
The UK personal allowance of £12,570 falls by £1 for every £2 of adjusted net income over £100,000, and it’s gone at £125,140 (GOV.UK). Adjusted net income is taxable income before allowances, minus pension contributions and Gift Aid. In that band each extra £1 is taxed at 40% and drags 50p of allowance into tax at 40% as well: 60% income tax, and with 2% National Insurance, 62p of each £1 goes.
A raise from £100,000 to £110,000 in 2026/27 adds £3,800 to take-home pay in England (£68,557.40 to £72,357.40, with no pension or student loan), against £5,800 at a plain 42%. Scroll’s UK lesson The 60% tax trap between £100k and £125k covers the same band.
Salary sacrifice lowers your salary, so it lowers adjusted net income too. Sacrifice the £10,000 into a workplace pension and adjusted net income stays at £100,000: take-home stays at £68,557.40, and the pension gets £10,000 for £3,800 of take-home pay. From 6 April 2029, National Insurance will be due on salary-sacrificed pension contributions above £2,000 a year (Budget 2025), which at 2026/27 rates would add £160 of employee National Insurance to that cost.
For parents, £100,000 is also a cliff. If either parent expects adjusted net income over £100,000 for the tax year, the family can’t get Tax-Free Childcare, which tops up childcare costs by up to £2,000 a year per child. In England the same limit applies to the 30 hours of free childcare for working parents. A raise from £99,000 to £101,000 adds £960 of take-home pay and can cost more than that in lost help.
The High Income Child Benefit Charge
If you or your partner get Child Benefit and your adjusted net income is over £60,000, you repay 1% of the benefit for every £200 above it, and all of it above £80,000 (GOV.UK). The charge goes on each person’s own income, and if both partners are over £60,000 the one with the higher income pays it.
Child Benefit for two children is £44.95 a week (GOV.UK), or £2,337.40 over 52 weeks, so each £200 above £60,000 costs £23.37. That adds 11.7p per £1 to 40% income tax and 2% National Insurance, so about 54p of each £1 goes between £60,000 and £80,000 (about 58p with three children). A raise from £58,000 to £62,000 with two children leaves £2,086.26 after £1,600 of income tax, £80 of National Insurance and a £233.74 charge. Pension contributions and Gift Aid shrink the charge too.
UK student loan repayments
Student loan repayments take 9% of income above your plan’s threshold, collected through payroll like tax. The 2026/27 thresholds are £26,900 for Plan 1, £29,385 for Plan 2, £33,795 for Plan 4 and £25,000 for Plan 5; postgraduate loans take 6% above £21,000 (GOV.UK).
On Plan 2, a basic-rate taxpayer loses 37p of each extra £1 (20% tax, 8% National Insurance, 9% loan), a higher-rate taxpayer 51p, and someone in the £100,000 to £125,140 band 71p. A raise from £28,000 to £32,000 adds £235.35 a year in Plan 2 repayments. The Plan 2 threshold is due to stay at £29,385 for three years from April 2027 (Budget 2025).
The US earned income tax credit
The earned income tax credit (EITC) grows with earnings, levels off, then shrinks. In 2026, for a family with two children, it peaks at $7,316 and falls by 21.06 cents for each dollar of income above $23,890 ($31,160 for married couples filing jointly), reaching zero at $58,629 ($65,899 joint). Those figures come from Revenue Procedure 2025-32 and the phase-out rates in the tax code, which are 15.98 cents with one child and 7.65 cents with none.
Say Dami, a single parent of two filing as head of household, earns $35,000 and gets a $3,000 raise. Her EITC falls by about $632, payroll tax takes $229.50 and federal income tax in the 10% bracket takes $300, so about $1,161 of the $3,000 goes: 39%, against 17.65% for someone in the same bracket outside the phase-out.
Means-tested programs such as SNAP and Medicaid also have income limits. They depend on your state and household, so we haven’t put numbers on them here.
The US senior deduction
If you’re 65 or older, you can take an extra $6,000 deduction for 2025 to 2028, but it shrinks by 6% of modified adjusted gross income above $75,000, or $150,000 for joint filers (26 U.S.C. 151(d)(5)(C)). In the 22% bracket that makes the federal rate on income in the phase-out 23.32% (22% × 1.06). A single filer whose income rises from $75,000 to $85,000 pays $2,332 more federal income tax instead of $2,200, and the deduction is gone at $175,000.
What to check before a raise or bonus
Find the lines you’re near. In the US, compare your taxable income (pay minus pre-tax deductions and the standard deduction) with the bracket table, and look for any credit or deduction with an income limit. In the UK, compare your adjusted net income with £50,270, £60,000, £100,000 and £125,140, and your pay with your student loan threshold.
Pension contributions move both numbers. Traditional 401(k) contributions aren’t subject to income tax withholding when you make them (IRS Topic 424), and UK pension contributions reduce adjusted net income. That’s why the same £10,000 is worth £3,800 as pay at £110,000 but £10,000 in a pension.
Scroll is education, not advice. Our lessons and calculators explain how money works in general. They don’t know your circumstances, so they can’t tell you what to do with yours. For that, speak to a qualified, regulated adviser in your country.
When the raise lands, the 50/30/20 budget calculator splits the new take-home pay, and the guide on lifestyle creep looks at how to keep more of a raise.
Drafted with AI assistance. Every figure was checked against the sources listed, on 14 October 2026.