The 2026/27 NHS Agenda for Change pay award has been confirmed. But headline percentage increases rarely translate directly into your take-home pay โ after PAYE tax, National Insurance, and NHS pension contributions, the amount that actually reaches your bank account can be substantially less than advertised.
How the deductions stack up for a Band 5 nurse
A typical Band 5 nurse on the midpoint of the scale (approximately ยฃ31,000 in 2025/26) moving to the 2026/27 uplifted rate:
- Gross annual increase: approximately ยฃ1,500
- Income tax on the increase (20% basic rate): โยฃ300
- National Insurance (8%): โยฃ120
- NHS Pension (approximately 8.9% of the uplift): โยฃ133
- Net monthly increase: approximately ยฃ87
That's roughly a quarter of the headline gross increase actually landing in your pocket each month. This isn't unique to the NHS โ it's how all PAYE employment works โ but it's worth understanding so the pay rise doesn't feel like a disappointment.
The NHS Pension factor
The NHS Pension Scheme uses tiered employee contribution rates based on pensionable pay. A pay rise can push you into a higher contribution tier, meaning the marginal take-home rate on the extra earnings is even lower than the income tax + NI rate would suggest.
From April 2023, the NHS contribution tiers were updated. If your pay rise pushes your pensionable pay above a tier threshold (e.g. from below ยฃ27,047 to above it), your contribution rate jumps from 5.1% to 6.5% on your entire pensionable pay โ a meaningful additional cost that's often overlooked when calculating the value of a pay award.
What you can do
- Use our NHS payslip explainer to understand every line on your payslip.
- Check whether your pay rise pushed you into a higher pension tier and what you can do about it.
- Use the payslip calculator to model your exact new take-home before the uplift appears on your payslip.