Should I take a pay cut for a better role?

The calculation that matters. What's the market salary for the role you'll be in 18-24 months after starting? If your current pay cut puts you on a path to a meaningfully higher market rate quickly, it's investment. If your pay cut just gets you to a more pleasant version of the same level, it's subsidy.

When pay cuts make sense. Career-change moves where your current salary is inflated relative to the new field (e.g., banker to FinTech operator, lawyer to PM). Stretch moves into a higher-prestige firm where the brand opens doors. Equity-heavy startup moves where the cash component is the headline but equity is the real bet. Industry switches where domain experience compounds.

When pay cuts are mistakes. Lateral moves to a 'better culture' or 'better manager' — these can usually be solved internally or via salary-equivalent moves. Roles where the trajectory isn't clearly upward. Companies where the pay-rise cycle is below market (you'll never recover). Joining as a 'foundational hire' without equity that compensates.

The 24-month test. Set your salary expectations 24 months from start date. If your current pay cut puts you significantly above your current trajectory at that point, it's worth it. If it puts you flat or behind, the pay cut needs to be balanced by something else — equity, brand, learning, lifestyle.

Don't anchor to the cut itself. The number that matters is the gap between what you'd otherwise be earning and what you'll be earning. A 15% pay cut on £80k vs a 15% pay cut on £120k are different financial decisions. Calculate the actual cash gap over 24 months and compare to the upside you're buying.