With your current salary under each year's HMRC rules (PAYE, England)
Estimates only · HMRC 2025/26 · Not financial advice
Monthly take-home
£5,893/mo
Keep
64%
The 60% Tax Trap Explained
If your income sits between £100,000 and £125,140, you are in the 60% tax trap. For every £2 you earn in this range, the government takes £1 in higher-rate tax and a further 40p by withdrawing your personal allowance. The net result: you keep just 40p of every extra pound.
How to escape the trap
Salary sacrifice into a pension reduces your adjusted net income, restoring your personal allowance. The calculator above models this — try increasing your pension contribution.
Frequently asked questions
The personal allowance (£12,570) tapers away at a rate of £1 for every £2 earned above £100,000. This means you lose £1 of tax-free income for every £2 of extra earnings. Combined with the 40% higher-rate tax on that income, the effective marginal rate is 40% + (40% × 0.5) = 60%.
Anyone with an income (including bonuses, dividends, or rental income) between £100,000 and £125,140. Once you pass £125,140 your personal allowance is fully withdrawn and you pay a flat 45% additional rate with no taper — painful, but at least no longer 60%.
The main routes are: (1) salary sacrifice into a pension — contributions reduce your adjusted net income and can restore the personal allowance; (2) Gift Aid donations — these extend your basic-rate band and reduce adjusted net income; (3) employer benefit packages that sit outside the taper. Many people near £100k deliberately cap their salary or bonus to avoid the trap.
Yes — it applies to your total 'adjusted net income', which includes employment income, self-employment profits, rental income, savings interest, and dividends. Pension salary sacrifice and Gift Aid donations reduce this figure.
Yes. Scottish taxpayers face a similar taper but the interaction is slightly different because the higher rate in Scotland is 42% (not 40%). This makes the effective taper rate in Scotland approximately 63%. This calculator handles the Scottish taper correctly when you select Scotland as your region.