The 60% Tax Trap Between GBP 100,000 and GBP 125,140
Why the pound after GBP 100,000 is taxed at 60%, why almost nobody notices, and the one move that reliably undoes it.
Between £100,000 and £125,140 of adjusted net income the Personal Allowance is withdrawn at £1 for every £2 earned. Each extra pound therefore costs 40p of income tax and removes 50p of allowance which is then taxed at 40p — 60p in total, or 62p once National Insurance is counted.
It is not a published rate and it does not appear on any HMRC rate table, which is why most people walk into it without being told. It is also, for anyone caught in it, the single largest arbitrage available in the UK tax system.
The marginal rate through the band
| Salary | Personal Allowance | Marginal rate | Keep from the next £1,000 |
|---|---|---|---|
| £95,000 | £12,570 | 42.0% | £580.00 |
| £100,000 | £12,570 | 62.0% | £380.00 |
| £108,000 | £8,570 | 62.0% | £380.00 |
| £115,000 | £5,070 | 62.0% | £380.00 |
| £125,140 | £0 | 47.0% | £530.00 |
| £135,000 | £0 | 47.0% | £530.00 |
The way out
Pension contributions and Gift Aid both reduce adjusted net income, and they are the only two levers most employees have. Sacrificing £10,000 from a £110,000 salary costs about £3,800 of take-home and puts £10,000 into the pension — an effective uplift of over 60%%.
For a parent of a nursery-age child there is a second reason: tax-free childcare and the free hours entitlement both cut off at £100,000 of adjusted net income per parent, and it is a cliff rather than a taper. This guide covers the interaction.
Questions people actually ask
Is there a 60% tax rate in the UK?
How do I get out of the 60% band?
The numbers this sits on
| Salary | Income tax | National Insurance | Take-home | A month | Effective rate |
|---|---|---|---|---|---|
| £25,000 | £2,486 | £994 | £21,520 | £1,793 | 13.9% |
| £35,000 | £4,486 | £1,794 | £28,720 | £2,393 | 17.9% |
| £45,000 | £6,486 | £2,594 | £35,920 | £2,993 | 20.2% |
| £60,000 | £11,432 | £3,210 | £45,358 | £3,780 | 24.4% |
| £85,000 | £21,432 | £3,710 | £59,858 | £4,988 | 29.6% |
| £110,000 | £33,432 | £4,210 | £72,358 | £6,030 | 34.2% |
Every figure in that table is computed from the published 2026/27 rates by the same engine that runs the calculators on this site, so a number in an article and a number in a calculator can never drift apart. National Insurance uses the statutory period thresholds real payroll uses, which is why these figures reconcile with a payslip rather than nearly reconciling with one.
| Salary | England, Wales, NI | Scotland | With a Plan 2 loan | Keep from the next £1,000 |
|---|---|---|---|---|
| £28,000 | 28.0% | 28.0% | 28.0% | £720.00 |
| £40,000 | 28.0% | 29.0% | 37.6% | £720.00 |
| £52,000 | 42.0% | 44.0% | 51.6% | £580.00 |
| £65,000 | 42.0% | 44.0% | 50.4% | £580.00 |
| £105,000 | 62.0% | 69.5% | 70.4% | £380.00 |
| £130,000 | 47.0% | 50.0% | 56.6% | £530.00 |
Work it out for yourself
- Take-home pay calculatorThe main calculator, all four UK nations.
- Pay rise calculatorWhat a raise really adds.
- Salary sacrificeWhat you are trading.
- Tax code checkerWhat each letter and prefix does.
Figures on this page are for the 2026/27 tax year (6 April 2026 to 5 April 2027) and were last checked on 29 August 2026. Every rate we use is listed on the sources page.