£100k Tax Trap Calculator
Earning between £100,000 and £125,140? See what the 60% tax trap costs you and how a pension fixes it.
United KingdomQuick answer
Above £100,000 the personal allowance falls by £1 for every £2 earned, creating an effective 60% income tax rate (62% with National Insurance) on income between £100,000 and £125,140. On a £115,000 salary, paying £15,000 into a pension restores the full allowance and saves £9,000 in income tax — so it costs only £6,000 from take-home pay.
Tax + National Insurance on your next £1 of pay: 62%
Pension contribution to escape the trap
£15,000
- Personal allowance you lose
- £7,500
- Income tax saved by contributing
- £9,000
- Real cost to your take-home pay
- £6,000
- Tax relief on the contribution
- 60%
- Take-home now (no pension)
- £74,257
England, Wales and NI, 2026/27. Salary sacrifice also saves 2% NI. Stay within the £60,000 pension annual allowance.
Pension contribution to get back to £100,000, 2026/27
| Salary | Allowance lost | Pension needed | Tax saved | Real cost |
|---|---|---|---|---|
| £105,000 | £2,500 | £5,000 | £3,000 | £2,000 |
| £110,000 | £5,000 | £10,000 | £6,000 | £4,000 |
| £115,000 | £7,500 | £15,000 | £9,000 | £6,000 |
| £120,000 | £10,000 | £20,000 | £12,000 | £8,000 |
| £125,140 | £12,570 | £25,140 | £15,084 | £10,056 |
| £130,000 | £12,570 | £30,000 | £17,271 | £12,729 |
How it works
The UK personal allowance is £12,570, but it is withdrawn at £1 for every £2 of 'adjusted net income' above £100,000, and disappears completely at £125,140. Each £2 earned in that band costs 40% higher-rate tax on the £2 plus 40% on the £1 of allowance lost — 60% in total, or 62% once 2% National Insurance is added. Because the thresholds are frozen until 2031, more people are pulled into this band every year.
The most common fix is a pension contribution. Adjusted net income is reduced by pension contributions made through salary sacrifice, a net pay arrangement or relief at source (grossed up), and by Gift Aid donations. Contribute enough to bring adjusted net income back to £100,000 and you keep the whole allowance — the money goes into your pension with up to 60% effective tax relief. Salary sacrifice saves the 2% National Insurance as well.
There is a second trap at the same line in England: once either parent's adjusted net income goes over £100,000, the family loses Tax-Free Childcare and the extra funded childcare hours. For parents of young children, that can cost thousands more than the tax itself — another reason to keep income at or below £100,000.
Keep within the pension annual allowance (£60,000 a year for most people, including employer contributions). For your full monthly pay after tax, NI and pension, use the UK take-home pay calculator. If you are thinking about reducing hours instead, the pro-rata salary calculator shows what part-time pay would be.
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Frequently asked questions
What is the £100k tax trap?
Between £100,000 and £125,140 you lose £1 of personal allowance for every £2 earned, so that slice of income is effectively taxed at 60% (62% with NI).
How do I avoid the 60% tax rate?
Reduce your adjusted net income to £100,000 — most often with pension contributions or salary sacrifice, and also with Gift Aid donations.
Does a bonus count towards the £100k?
Yes. Bonuses, benefits in kind, rental income and savings interest all count toward adjusted net income. Many employers let you sacrifice a bonus into your pension.
Is the £100k threshold changing?
The £100,000 taper threshold and the £12,570 allowance are frozen until April 2031 under current plans.