New research from The Global Payroll Association (GPA), reveals that less than one fifth of UK office workers have asked their employer for a pay rise, and that employees whose current salary puts them on the cusp of a higher income tax threshold need to ask for a bigger raise than they might think.
GPA has surveyed 1,012 UK office workers to gain insight into how many people are actively requesting a pay rise and whether or not they know how best to broach the subject with their employer.
Autumn Budget overhaul to National Living Wage
For some employees, a pay rise is on the cards without even having to ask for it.
During last week’s Autumn Budget, one of Rachel Reeves’s biggest announcements was an overhaul of the National Living Wage (NLW).
From April 2025, the NLW for apprentices and under-18s will rise by 18%, from the current hourly wage of £6.40 up to £7.75. The NLW for 18-20-year-olds will rise by 16.3% to hit £10 per hour, and for workers over the age of 21, it will increase by 6.7% to hit £12.21.
Therefore, any employees who currently earn less than the new NLW will be legally entitled to a pay increase without having to actively request them. But for anyone who already earns more than this, a pay rise is likely going to require a more proactive approach.
Do you know when to ask for a raise?
GPA’s survey starts by revealing that office workers tend to stay with their companies for a long time. 71% have been with their current employer for at least five years, and a further 12% have stayed put for 3-4 years.
The good news is that 91% of employees have received a pay increase during their time at their current company, with the majority of people (64%) )receiving their raises on an annual basis. However, there remains a sizable chunk of employees (31%) who are having to wait more than two years between increases.
Performance reviews are an opportune time to either ask for or be offered a pay rise, and there’s good news in the fact that 67% say they receive a review on an annual or quarterly basis. As such, more than half (56%) of office workers have already received a boost in pay in 2024.
However, it’s clear that the vast majority of people are waiting to be offered an increase instead of actively requesting one, with just 17% saying they have directly asked for a pay rise.
One reason for so few actively seeking a boost in pay is a lack of understanding around when and how to best request a rise. In fact, only 24% say they know which time of year is best for asking for a boost in pay.
Understanding income tax thresholds and how much of a raise you should be asking for
One thing employees need to be aware when asking for a pay rise is income tax thresholds.
During the Autumn Budget, Labour announced that income tax thresholds are to be frozen through to 2028.
Therefore, until at least 2028, employees pay no income tax on earnings up to £12,570 (Personal Allowance); pay 20% on earnings between £12,571 – £50,270 (Basic Rate); 40% on earnings between £50,271 – £125,140 (Higher Rate); and 45% on all earnings over £125,000 (Additional Rate).
So when you’re requesting a raise, it’s vital to be aware that if your raise tips you into a new threshold, your raise could result in you paying a higher level of tax which will eat into any additional income you receive.
For example, if you currently earn £50,270 per year, you’re right on the cusp of the Higher Rate threshold. As such, a 2% increase may boost your salary by £1,005, but because it’s tipped you into the Higher Rate, you’ll only actually be £585 better off after tax.
The key takeaway here is that if your current salary puts you close to a tax threshold, you really want to be asking for a raise of at least 5% to make it worthwhile.
Melanie Pizzey, CEO and Founder of the Global Payroll Association, said, “Asking for a pay rise is not always easy. It takes a certain amount of confidence and a good relationship with your managers. It also requires the correct timing because there are certain times of the year when a company is more amenable to the idea of issuing pay rises and the payroll department is well placed to implement the required changes.
It’s essential that you understand your value to the company, and have belief in the fact that you are an important member of the team. Some businesses have a mindset of never offering pay rises until someone actually requests one, so if you’re always on top of your duties and understand your value, you’ll know when you’re due a boost in pay and will have the clarity of mind to put your cards on the table.”
