Most discussion of the £100,000 threshold stops at the 60% effective tax rate. That rate is real, and the calculator above shows exactly how much of your Personal Allowance you lose. But for many households it is not the most expensive thing that happens at £100,000. The bigger costs are the support schemes that switch off completely at the same line, and the timing mistakes that leave people paying the 60% rate when they didn't need to.
The childcare cliff
Two of the most valuable forms of help for working parents use the same test: neither parent can have an adjusted net income above £100,000. The first is Tax-Free Childcare, where the government adds £2 for every £8 you pay into a childcare account, worth up to £2,000 a year per child under 12. The second, in England, is the funded childcare entitlement for working parents, which now covers up to 30 hours a week from nine months old until school age.
Unlike the Personal Allowance, these don't taper. Earn £99,999 and you keep them all; earn £100,001 and you lose them all, for every child, for as long as your income stays above the line. For a family with two young children in nursery, the funded hours alone can be worth several thousand pounds a year, depending on local nursery fees. That is why a salary just over £100,000 can leave a family worse off than one just under it, even before the tax trap is counted.
A worked example: £104,000 with two children in nursery
Alex earns £104,000 a year. At that income, £2,000 of their Personal Allowance has gone, leaving £10,570, and take-home pay is about £70,077. More importantly, their adjusted net income is £4,000 over the childcare limit, so the family loses Tax-Free Childcare for both children, up to £4,000 a year, plus their funded hours.
If Alex sacrifices £4,000 of salary into their workplace pension, adjusted net income falls to exactly £100,000. The full £12,570 allowance comes back and the childcare support is restored. Take-home falls by only about £1,520, because every pound sacrificed in this band saves 40% income tax, the 20% effectively charged through the lost allowance, and 2% National Insurance. So the family puts £4,000 into Alex's pension, pays £1,520 for it, and keeps childcare support worth more than that on its own. Running the same figures through the calculator above is the quickest way to see where your own income sits.
Gift Aid counts too
Pension contributions are the usual tool, but charitable giving through Gift Aid also reduces adjusted net income. When you donate £800 with Gift Aid, the charity claims basic-rate tax to make it £1,000, and your adjusted net income falls by the grossed-up £1,000. If you already give regularly, routing donations through Gift Aid and claiming the higher-rate relief through Self Assessment can pull you back below the line at no extra cost. It works best alongside pension contributions rather than instead of them, because few people give enough to close a large gap.
Timing: the threshold is annual
Adjusted net income is measured across the whole tax year, from 6 April to 5 April. That has two practical consequences. First, a bonus paid in March can push you over the line for the entire year, even if your salary sat comfortably below it. Second, you can still fix it after the bonus arrives: a personal pension contribution made before 5 April reduces adjusted net income for that year by the gross amount. If your employer offers bonus sacrifice, agreeing it before the bonus is paid is cheaper still, because it also saves National Insurance.
The cost of getting the timing wrong is not only the higher tax. If you have claimed Tax-Free Childcare and your income ends up over £100,000, you must tell HMRC and stop using the account. Check your likely full-year income at each reconfirmation point, not just at the start of the year.
Common mistakes
The most common mistake is assuming the £100,000 test applies to household income. It doesn't: it is each parent's individual adjusted net income, so a couple on £90,000 each keeps the support while a single earner on £101,000 loses it. Another is forgetting that relief-at-source pension contributions, the kind made into a personal pension or SIPP, reduce adjusted net income by the gross amount, including the 20% the provider claims back. Contributions paid by salary sacrifice reduce your salary itself, so there is nothing to claim. Finally, check your contract before sacrificing. Salary sacrifice can't take your pay below the National Minimum Wage, and some mortgage lenders look at your post-sacrifice salary.
Next steps
Use the calculator above to find your adjusted net income and the sacrifice that restores your allowance. The salary sacrifice calculator shows the full tax and National Insurance saving, and if Child Benefit is also in play, the High Income Child Benefit Charge calculator shows how the £60,000 to £80,000 taper interacts with your pension plans.
For a longer walk-through, see our guides: the £100k tax trap explained gives take-home figures through the taper, including the Scottish 69.5% rate, and salary sacrifice explained covers the effects on mortgages, maternity pay and the April 2029 cap.