The new offer pays £4,000 more. That is good news. It is not yet the answer to whether your household will be better off.
A salary is quoted before deductions. Commuting and most other household costs are paid afterwards. Pension contributions belong in the comparison too, but pension wealth cannot pay this month’s train fare. A useful job comparison keeps those columns separate.
Compare two offers on the same basis
Illustrative worked example, not an actual vacancy or personal tax calculation. Consider an employee in England, Wales or Northern Ireland comparing £36,000 with £40,000 a year in 2026–27. They have the standard £12,570 Personal Allowance, no other income, student loan, benefits adjustment or taxable benefits. Pay is even across twelve months and employee National Insurance is category A.
Assume both schemes use relief at source and an employee contribution of 5% of the whole salary. This is an example scheme basis, not the statutory minimum calculation. The employee pays 80% of the gross contribution and the provider claims basic-rate relief. Both employers separately contribute 3% of whole salary.
The Income Tax bands, employee National Insurance thresholds and pension tax-relief method are the official starting points. Scottish income-tax bands differ; salary sacrifice or a different pension method changes the calculation.
| Annual comparison | Current job | New offer |
|---|---|---|
| Gross salary | £36,000 | £40,000 |
| Income Tax: (salary − £12,570) × 20% | £4,686 | £5,486 |
| Employee NI, approximately | £1,873.92 | £2,193.92 |
| Employee pension paid from net pay | £1,440 | £1,600 |
| Cash after these deductions | £28,000.08 | £30,720.08 |
| Gross employee pension contribution | £1,800 | £2,000 |
| Employer pension contribution | £1,080 | £1,200 |
NI uses 8% of monthly pay above £1,048; both salaries remain below the monthly upper threshold. The annual totals shown use unrounded monthly salary and calculations, so actual payroll rounding can differ by pennies. The salary rise produces £2,720 more annual cash, or about £226.67 a month after the assumed pension payments.
The extra £320 reaching the pension each year is also valuable: £200 more gross employee contribution plus £120 more employer contribution. It is recorded separately, not added to spendable monthly cash.
Price the change in working pattern
Assume the current role requires one office day a week and the new role four, over 46 working weeks. Each additional office day costs £12 return travel and £5 more for food than staying home. These are illustrative spending assumptions, not transport quotes.
Extra days: 3 × 46 = 138. Extra annual cost: 138 × (£12 + £5) = £2,346.
The household cash gain is now £2,720 − £2,346 = £374 a year, about £31.17 a month. If the change also requires £25 a week of extra childcare for those 46 weeks, another £1,150 turns that into a £776 annual cash reduction.
Use the increase in costs, not the entire new-job budget. You were already eating lunch and already travelling one day a week. Counting every new lunch as an extra cost would exaggerate the disadvantage.
Time belongs beside the calculation
At 90 minutes per additional round trip, 138 trips consume 207 hours a year. Do not deduct an invented monetary wage for those hours from the cash result; that would mix two different measures. Put the 207 hours beside it and decide what they displace.
The new role may offer training, better management or a route into work you want. Those benefits can justify a small initial cash gain. Equally, an attractive title may not compensate for losing the school pickup arrangement that makes the week work.
A promised promotion is an uncertain benefit, not guaranteed income. Compare the offer you have received before building a second scenario for what it might become.
Ask for the terms behind the headline
Check contracted hours, office attendance, pensionable pay, bonus conditions, annual leave and any repayment terms attached to training. A discretionary bonus should not fund a fixed monthly commitment. A hybrid arrangement that matters to affordability is worth confirming clearly rather than relying on an informal conversation.
Before accepting, run a stress case with one more office day, no bonus and your actual travel quote. If the offer still works, that is stronger evidence than the gross salary alone. If it does not, the calculation gives you something concrete to negotiate: salary, attendance, working hours or support with a specific cost.
The decision need not be “stay because commuting is expensive”. It might be “this opportunity is worth taking, but only on these terms”. That is a more useful conclusion than discovering the terms through your bank balance three months later.
