Example
Comparing two job offers
A worked example showing why two job offers with similar gross pay can deliver meaningfully different take-home outcomes — with full deduction breakdowns for the 2025-26 tax year.
## Scenario
You have two job offers. Offer A pays £55,000 base salary with a 3% employer pension match. Offer B pays £50,000 base salary with a 5% employer pension match plus a £5,000 expected annual bonus. Both have the same headline total compensation of roughly £55,000-£57,000 on paper. Which one actually puts more money in your pocket each month?
Offer A: £55,000 base, 3% employer pension
| Deduction | Annual | Monthly | |-----------|--------|---------| | Gross salary | £55,000 | £4,583 | | Income tax: 20% on £37,700 | £7,540 | £628 | | Income tax: 40% on £4,730 (above £50,270) | £1,892 | £158 | | Employee NI: 8% to £50,270, then 2% | £3,111 | £259 | | Take-home pay | £42,457 | £3,538 |
Employer pension contribution: 3% of £55,000 = £1,650 per year into your pension.
Total value: £3,538/month cash + £138/month pension = £3,676/month total.
Offer B: £50,000 base + £5,000 bonus + 5% employer pension
Base salary take-home (guaranteed):
| Deduction | Annual | Monthly | |-----------|--------|---------| | Gross salary | £50,000 | £4,167 | | Income tax (20% basic rate) | £7,486 | £624 | | Employee NI (8%) | £3,016 | £251 | | Take-home pay (base only) | £39,498 | £3,292 |
Bonus take-home (if paid):
The £5,000 bonus is taxed at your marginal rate. Since £50,000 is just below the higher-rate threshold, the bonus pushes you into the 40% band:
| On the £5,000 bonus | Amount | |---------------------|--------| | First £270 (to £50,270 threshold) at 20% tax + 8% NI | Tax £54, NI £22 | | Remaining £4,730 at 40% tax + 2% NI | Tax £1,892, NI £95 | | Net bonus received | £2,937 |
Employer pension contribution: 5% of £50,000 = £2,500 per year into your pension.
Total value (if bonus paid): £3,292/month cash + £245/month bonus (averaged) + £208/month pension = £3,745/month total.
Total value (if bonus NOT paid): £3,292/month cash + £208/month pension = £3,500/month total.
The comparison
| | Offer A (£55k base) | Offer B (£50k + bonus) | Difference | |---|---------------------|------------------------|------------| | Guaranteed monthly cash | £3,538 | £3,292 | A wins by £246/month | | Monthly cash if bonus pays | £3,538 | £3,537 | Virtually equal | | Monthly pension value | £138 | £208 | B wins by £70/month | | Annual pension value | £1,650 | £2,500 | B wins by £850/year | | Total comp (with bonus) | £3,676/mo | £3,745/mo | B wins by £69/month | | Total comp (without bonus) | £3,676/mo | £3,500/mo | A wins by £176/month |
What to notice
1. Guaranteed cash strongly favours Offer A. You will receive £246 more per month regardless of performance. The bonus in Offer B must pay out to equalise.
2. The bonus is taxed more heavily than it appears. The £5,000 gross bonus only delivers £2,937 after tax and NI — a 41% effective rate — because most of it falls in the higher-rate band.
3. Pension value tips the total towards Offer B, but only if you value the higher employer contribution. If you would not otherwise save that amount, the pension difference matters. If you need the cash now, it does not.
4. Risk profile is the real differentiator. Offer A gives you certainty. Offer B requires the bonus to be paid and requires you to value the extra pension contribution.
Best next step
Use the job offer comparison calculator with your exact figures — base salary, bonus, pension terms, and tax region. If one offer includes salary sacrifice, model it separately using the salary sacrifice calculator to see how it changes the net position.
How to use PayPath here
Run the relevant calculator for your live numbers, review the methodology if the assumptions matter to your decision, and save the strongest scenarios in the workspace if you are comparing more than one option.