£16,000 vs £18,000 After Tax 2025-26
Side-by-side UK take-home pay comparison · Income Tax + National Insurance
You keep £1,440 more per year
Earning £18,000 instead of £16,000 gives you £120 more per month (£28/week). Of the £2,000 gross difference, you keep 72% after tax and NI.
£16,000 — Income Tax bands
| Band | Tax |
|---|---|
| Personal Allowance | — |
| Basic Rate (20%) | £686 |
| Total Income Tax | £686 |
£18,000 — Income Tax bands
| Band | Tax |
|---|---|
| Personal Allowance | — |
| Basic Rate (20%) | £1,086 |
| Total Income Tax | £1,086 |
Full breakdown — £16,000 vs £18,000
| £16,000 | £18,000 | Difference | |
|---|---|---|---|
| Gross salary | £16,000 | £18,000 | +£2,000 |
| Income Tax | £686 | £1,086 | +£400 |
| National Insurance | £274 | £434 | +£160 |
| Total deductions | £960 | £1,520 | +£560 |
| Net pay (annual) | £15,040 | £16,480 | +£1,440 |
| Net monthly | £1,253 | £1,373 | +£120 |
| Net weekly | £289 | £317 | +£28 |
| Net daily | £58 | £63 | +£5 |
| Effective tax rate | 6% | 8.44% | |
| Marginal tax rate | 28% | 28% |
£16,000 vs £18,000 after tax — what you actually keep
On a £16,000 salary, you take home £15,040 per year (£1,253/month). On £18,000, you take home £16,480 per year (£1,373/month). The £2,000 gross difference translates to £1,440 extra take-home — you keep 72% of the raise.
Income Tax on £16,000 is £686, rising to £1,086 on £18,000. National Insurance increases from £274 to £434. Together these deductions mean HMRC takes £560 of the £2,000 difference.
Why the effective rate changes
At £16,000 the effective tax rate is 6%, while at £18,000 it rises to 8.44%. This is because additional earnings are taxed at the marginal rate (28% on £18,000), which is higher than the blended average. The more you earn, the greater the proportion taken in tax and NI.
Frequently asked questions
How much more do I take home on £18,000 vs £16,000?
On £18,000 you take home £16,480/year (£1,373/month), compared to £15,040/year (£1,253/month) on £16,000. That is £1,440 more per year, or £120 more per month.
Why is the net difference (£1,440) less than the gross difference (£2,000)?
Of the £2,000 gross difference, you keep £1,440 (72%) after Income Tax and National Insurance. The rest goes to HMRC. Your marginal rate on £16,000 is 28% and on £18,000 it is 28%.
What is the effective tax rate on £16,000 vs £18,000?
The effective tax rate (Income Tax + NI as a percentage of gross) is 6% on £16,000 and 8.44% on £18,000. The higher salary has a higher effective rate because more income falls into higher tax bands.
How much tax and NI do I pay on £16,000 vs £18,000?
On £16,000: Income Tax £686 + NI £274 = £960 total deductions. On £18,000: Income Tax £1,086 + NI £434 = £1,520 total deductions.