Pay rises – the implications for take-home pay

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By Dr Ed Cantelo

The DDRB has reported and the government has accepted the recommendations of a 4% pay uplift for doctors with an additional amount for resident doctors in England. The impact, however, will vary depending on your circumstances and in this article we cover some of the areas to consider.

1. Freezing of tax bands

Tax bands in England, Wales and Northern Ireland have been frozen for several years now. In Scotland there have been some changes to the lower bands in 2025/26 but where taxable pay is above taxable levels of £43,662, they have been frozen.

The significant downside to this is something called ‘fiscal drag’. This is when your income goes up, and is more likely to move into the higher rate tax bands which means you proportionally pay more tax on the extra income you earn from a pay rise.

2. ‘Cliff edge’ tax bands

Higher rate tax starts where your taxable income is above £50,270 per annum (except in Scotland). This means that 40% tax is paid on any additional income (again more in Scotland.) The Additional higher rate of 45% (48% in Scotland) applies on all income over £125,140 but these are not the highest tax rates you pay on marginal income: