£100k tax trap calculator
Earn between £100,000 and £125,140 and every extra £100 of salary costs £62 in tax and National Insurance. Find out how much Personal Allowance you lose and how much pension contribution would win it back.
Why the rate is 60%
Above £100,000, your £12,570 Personal Allowance is reduced by £1 for every £2 of income. An extra £100 of salary is taxed at 40% (£40), and it also removes £50 of allowance, which is then taxed at 40% (£20). That is £60 of income tax on £100, plus 2% National Insurance.
| Salary | Personal Allowance | Income tax | Take-home | Rate on the last £1,000 |
|---|---|---|---|---|
| £100,000 | £12,570 | £27,432 | £68,557 | 42.0% |
| £105,000 | £10,070 | £30,432 | £70,457 | 62.0% |
| £110,000 | £7,570 | £33,432 | £72,357 | 62.0% |
| £115,000 | £5,070 | £36,432 | £74,257 | 62.0% |
| £120,000 | £2,570 | £39,432 | £76,157 | 62.0% |
| £125,140 | £0 | £42,516 | £78,111 | 62.0% |
| £130,000 | £0 | £44,703 | £80,686 | 47.0% |
How to get out of the trap
- Pension contributions: salary sacrifice or personal contributions reduce adjusted net income. Every £100 contributed from salary in the trap costs you as little as £38 (see salary sacrifice).
- Gift Aid: the grossed-up value of charity donations also reduces adjusted net income.
- Childcare: above £100,000 you also lose tax-free childcare and the 30 hours of funded childcare in England, which can be worth far more than the tax.
FAQ
What is adjusted net income?
Your total taxable income minus personal pension contributions (grossed up), Gift Aid donations (grossed up) and certain trading losses. Salary sacrifice reduces it automatically because your salary is lower.
Is the 60% rate the same in Scotland?
The taper is the same, but it is charged at the Scottish 45% advanced rate, so the effective rate is 67.5% plus 2% National Insurance.
Does a bonus count?
Yes. A bonus that takes your income over £100,000 loses allowance just like salary. Some employers let you sacrifice a bonus into your pension.