£16,000 vs £21,000 After Tax 2025-26
Side-by-side UK take-home pay comparison · Income Tax + National Insurance
You keep £3,600 more per year
Earning £21,000 instead of £16,000 gives you £300 more per month (£69/week). Of the £5,000 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 |
£21,000 — Income Tax bands
| Band | Tax |
|---|---|
| Personal Allowance | — |
| Basic Rate (20%) | £1,686 |
| Total Income Tax | £1,686 |
Full breakdown — £16,000 vs £21,000
| £16,000 | £21,000 | Difference | |
|---|---|---|---|
| Gross salary | £16,000 | £21,000 | +£5,000 |
| Income Tax | £686 | £1,686 | +£1,000 |
| National Insurance | £274 | £674 | +£400 |
| Total deductions | £960 | £2,360 | +£1,400 |
| Net pay (annual) | £15,040 | £18,640 | +£3,600 |
| Net monthly | £1,253 | £1,553 | +£300 |
| Net weekly | £289 | £358 | +£69 |
| Net daily | £58 | £72 | +£14 |
| Effective tax rate | 6% | 11.24% | |
| Marginal tax rate | 28% | 28% |
£16,000 vs £21,000 after tax — what you actually keep
On a £16,000 salary, you take home £15,040 per year (£1,253/month). On £21,000, you take home £18,640 per year (£1,553/month). The £5,000 gross difference translates to £3,600 extra take-home — you keep 72% of the raise.
Income Tax on £16,000 is £686, rising to £1,686 on £21,000. National Insurance increases from £274 to £674. Together these deductions mean HMRC takes £1,400 of the £5,000 difference.
Why the effective rate changes
At £16,000 the effective tax rate is 6%, while at £21,000 it rises to 11.24%. This is because additional earnings are taxed at the marginal rate (28% on £21,000), 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 £21,000 vs £16,000?
On £21,000 you take home £18,640/year (£1,553/month), compared to £15,040/year (£1,253/month) on £16,000. That is £3,600 more per year, or £300 more per month.
Why is the net difference (£3,600) less than the gross difference (£5,000)?
Of the £5,000 gross difference, you keep £3,600 (72%) after Income Tax and National Insurance. The rest goes to HMRC. Your marginal rate on £16,000 is 28% and on £21,000 it is 28%.
What is the effective tax rate on £16,000 vs £21,000?
The effective tax rate (Income Tax + NI as a percentage of gross) is 6% on £16,000 and 11.24% on £21,000. 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 £21,000?
On £16,000: Income Tax £686 + NI £274 = £960 total deductions. On £21,000: Income Tax £1,686 + NI £674 = £2,360 total deductions.