£100k Tax Trap Calculator 2026/27 — Beat the 60% Marginal Rate

£100k Tax Trap Calculator — the 60% Rate 2026/27

Between £100,000 and £125,140 your personal allowance is withdrawn £1 for every £2 you earn, stacking a 40% headline rate with lost tax-free income to create a 60% effective marginal rate. This calculator shows your adjusted net income, the allowance you are losing, and the precise pension sacrifice that pulls you back under £100,000.

Why £100,000 is the most expensive salary threshold in the UK

There is no 60% Income Tax band in the UK — but between £100,000 and £125,140 there may as well be. The reason is the personal-allowance taper: once your adjusted net income passes £100,000, HMRC withdraws £1 of your £12,570 tax-free allowance for every £2 you earn. The allowance is gone completely by £125,140.

Because you are already a higher-rate taxpayer, that extra £2 is taxed at 40% (£0.80), and the £1 of allowance you lose is also now taxed at 40% (£0.40). That is £1.20 of tax on £2 of income — a 60% effective marginal rate. Add 2% employee National Insurance and the marginal rate is really 62%.

The trap in one line: a £5,000 pay rise from £100,000 to £105,000 gives you only about £1,900 more in your pocket. The other ~62% vanishes in tax and NI. This is why so many high earners near £100k redirect raises and bonuses straight into a pension.

What is adjusted net income, and why it matters here

The taper is measured against adjusted net income — not your gross salary. Adjusted net income is your total taxable income minus grossed-up pension contributions and Gift Aid. That is the lever: anything that legally lowers adjusted net income below £100,000 restores your allowance and undoes the 60% band.

The two most effective levers are:

Pension salary sacrifice. Swapping salary for an employer pension contribution reduces the income both the taper and National Insurance are charged on. Pound for pound, it is the cleanest escape.
Gift Aid. A £800 net donation is grossed up to £1,000 and reduces adjusted net income by the full £1,000, as well as extending your basic-rate band.

Worked example: £110,000 with and without a £10,000 sacrifice

On £110,000 with no pension, adjusted net income is £110,000, so you lose £5,000 of allowance (half of the £10,000 over £100k). Your personal allowance falls to £7,570 and the slice of income between £100,000 and £110,000 is taxed at that punitive 60% effective rate.

Now sacrifice £10,000 into your pension. Adjusted net income drops to £100,000, the full £12,570 allowance is restored, and the £10,000 that would have been taxed at 60% goes into your pension instead. You have effectively bought £10,000 of pension for a net cost of about £4,000 — the government funds the rest through the reclaimed allowance and higher-rate relief. Press Calculate above with the preset £110,000 and watch the solver suggest exactly £10,000.

Scotland: the same trap, stacked on 45%

The personal allowance is a reserved, UK-wide figure, so Scottish taxpayers face the identical taper — but they hit it inside the 45% Advanced band rather than the 40% higher band. The combined effect is an effective marginal rate of roughly 67.5% on income between £100,000 and £125,140. Toggle Scottish taxpayer in the calculator to see your figure; the case for pension sacrifice is even stronger north of the border.

To model your whole pay packet, use the take-home pay calculator, and to see the tax and NI a sacrifice saves at any salary, the salary sacrifice calculator. If a bonus is what tips you over £100k, the compare two salaries tool shows the true net difference.

Source: GOV.UK — Income over £100,000 and GOV.UK — adjusted net income.

Frequently Asked Questions

What is the 60% tax trap?

Between £100,000 and £125,140 of adjusted net income, your £12,570 personal allowance is reduced by £1 for every £2 you earn. You pay 40% on the extra income and 40% again on the allowance you lose, so each extra £2 carries £1.20 of tax — a 60% effective marginal rate. It is not a separate tax band, just the combined effect of the taper and the higher rate.

How do I avoid the £100k tax trap?

Reduce your adjusted net income below £100,000. The most efficient way is pension salary sacrifice, which lowers the income the taper is measured against pound for pound; Gift Aid donations do the same. This calculator's solver shows the exact sacrifice needed. Above £125,140 the allowance is already gone, so there is nothing left to reclaim.

What counts as adjusted net income?

Adjusted net income is your total taxable income (salary, bonus, benefits in kind, savings and dividend income) minus grossed-up pension contributions and Gift Aid donations. It is the figure HMRC uses for the personal-allowance taper and the High Income Child Benefit Charge, not your headline salary.

Does the £100k trap apply in Scotland?

Yes. The personal-allowance taper is UK-wide because the personal allowance is reserved to Westminster, but Scottish taxpayers hit it while paying the 45% Advanced rate rather than 40%. That pushes the effective marginal rate in the taper to roughly 67.5%, making pension sacrifice even more valuable. Toggle Scottish taxpayer to see the figure.

How much pension do I need to contribute to get under £100k?

Exactly the amount by which your adjusted net income exceeds £100,000. If you are on £110,000 with no other reliefs, a £10,000 pension sacrifice brings you to £100,000 and restores the full £12,570 allowance. The calculator computes this for you from your gross, bonus and any Gift Aid.

Is the £60k Child Benefit charge related?

It's a separate cliff for parents. The High Income Child Benefit Charge claws back Child Benefit between £60,000 and £80,000 of adjusted net income. If you're affected by both, reducing adjusted net income helps on both fronts — see our take-home and salary-sacrifice tools.