Key facts
- Personal Allowance £12,570 tapers from £100,000
- Allowance fully withdrawn at £125,140 adjusted net income
- Effective 60 percent marginal income tax rate in the taper band for England, Wales and NI
- Scottish taxpayers face around 67.5 percent in the same band
- Pension contributions, salary sacrifice, and Gift Aid reduce adjusted net income
Model your tax with the income tax calculator, see how pension saving helps in our pension tax relief guide, or read about bonuses that can push you into the trap in the bonus tax guide.
What the 60 percent tax trap is
The 60 percent tax trap is not a separate HMRC rate. It is the combined effect of paying higher rate income tax while your Personal Allowance of £12,570 is withdrawn at the same time.
For 2026/27, adjusted net income above £100,000 reduces your Personal Allowance by £1 for every £2 earned. The allowance disappears entirely at £125,140. On each extra pound in that range you pay 40% higher rate tax and lose tax free allowance worth another 20% in tax, giving an effective 60% marginal income tax rate in England, Wales and Northern Ireland.
A worked example
Between £100,000 and £125,140, the extra income tax from losing the Personal Allowance adds about £15,084 on top of normal higher rate tax, an average effective rate of 60 percent across the full £25,140 band.
| Adjusted net income | Personal Allowance | Income tax |
|---|---|---|
| £100,000 | £12,570 | £27,432 |
| £110,000 | £7,570 | £33,432 |
| £125,140 | £0 | £42,516 |
At £110,000, you lose £5,000 of Personal Allowance compared with someone on £100,000, which adds about £2,000 of extra income tax on top of the standard higher rate bill.
It is worse in Scotland
Scottish taxpayers use the same UK wide Personal Allowance taper, but pay Scottish income tax rates on earnings. In the taper band most of the income sits in the 45% advanced rate band from £75,001.
Losing £1 of allowance for every £2 earned while paying 45% on the income creates an effective rate of about 67.5 percent in this band, higher than the 60 percent trap in the rest of the UK. See our Scottish income tax guide for the full band breakdown.
How to reduce or avoid it
Pension contributions reduce your adjusted net income for the taper test. Workplace salary sacrifice is usually the most efficient route because it saves income tax and National Insurance. Personal pension contributions also count once you claim higher rate relief through self assessment.
Gift Aid donations work the same way: the gross donation reduces adjusted net income. Combining pension saving and Gift Aid can restore some or all of your Personal Allowance if you bring income back below £100,000.
On a £110,000 salary, a £10,000 salary sacrifice pension contribution that brings adjusted net income back to £100,000 saves about £6,200.00 in tax and NI. Cash take home falls from £72,357.40 to £68,557.40, but the £10,000 still sits in your pension pot.
For more on how sacrifice works, see salary sacrifice explained.
Income Tax Calculator
Enter your salary to see income tax by band and how the Personal Allowance taper affects your bill.
Other effects at £100,000
Crossing £100,000 has effects beyond income tax. Parents can lose eligibility for 30 hours of free childcare and Tax Free Childcare once adjusted net income exceeds the threshold. For families, the combined cost of lost childcare support and the 60 percent marginal rate can make a pay rise in this band much more expensive than the headline tax rate suggests.
Bonuses can trigger the trap quickly
A one off bonus that takes adjusted net income over £100,000 is taxed at the effective 60 percent rate on the portion inside the taper band. Redirecting all or part of a bonus into pension via salary sacrifice before payday is a common way to avoid the hit. See the bonus tax guide for worked examples.Related Calculators
Frequently Asked Questions
Between £100,000 and £125,140 you lose £1 of Personal Allowance for every £2 earned, which creates an effective 60 percent tax rate on that income.
You pay 40 percent on the income and lose tax free allowance at the same time, which adds up to an effective 60 percent in England, Wales and Northern Ireland.
At £125,140 of adjusted net income.
Pension contributions, salary sacrifice, and Gift Aid reduce your adjusted net income, which can restore your Personal Allowance.
Yes, the effective rate is around 67.5 percent in this band because the Scottish advanced rate is 45%.
Your total taxable income less certain reliefs such as pension contributions and Gift Aid, used to test the taper.
Yes, it can remove free childcare hours and Tax Free Childcare, adding to the cost for parents.
Yes, a bonus that takes adjusted net income over £100,000 can be taxed at the effective 60 percent rate.
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James Hartley is a CIMA qualified financial analyst and Founder and Lead Financial Analyst at WhatsUK, with 8+ years in UK tax, payroll, and compliance. He builds every calculator on WhatsUK and authors all editorial content, ensuring every figure is verified against official HMRC sources before publication.
Sources & Official References
- GOV.UK Income Tax rates and Personal Allowances- Personal Allowance and taper thresholds for 2026/27
- GOV.UK Income over £100,000- How adjusted net income reduces the Personal Allowance
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Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.