Earn between £100,000 and £125,140 and each extra £1 is taxed at 60%, plus 2% National Insurance. On £110,000 you keep 38p of the next pound. Pension contributions and Gift Aid are the two legal ways out.
Nothing on a payslip says 60%. The rate appears because two rules overlap: the higher rate of 40% and the gradual removal of your tax-free personal allowance. Together they make the band from £100,000 to £125,140 the most heavily taxed pay in the UK, harder hit than income over £125,140.
How the trap works
Once your adjusted net income passes £100,000, you lose £1 of personal allowance for every £2 you earn. So an extra £100 of salary costs 40% tax on the £100 itself, and moves another £50 of previously tax-free income into the 40% band. That is £40 plus £20, or £60 of tax on £100.
The allowance is gone by £125,140. On £110,000 it has already shrunk from £12,570 to £7,570, and the £5,000 that vanished is now taxed at 40%.
On £110,000, the next £1 you earn leaves you with 38p
What it costs at each salary
A pay rise from £100,000 to £110,000 adds £10,000 to gross pay but only £3,800 to take-home pay. Compare the same £10,000 rise at other points on the scale:
Someone on £140,000 keeps more of a rise than someone on £100,000, which is the whole oddity in one line. Take-home pay on £110,000 is £72,357 a year. The table shows how the allowance falls away through the band:
| Salary | Personal allowance | Income tax | Take-home |
|---|---|---|---|
| £100,000 | £12,570 | £27,432 | £68,557 |
| £105,000 | £10,070 | £30,432 | £70,457 |
| £110,000 | £7,570 | £33,432 | £72,357 |
| £115,000 | £5,070 | £36,432 | £74,257 |
| £120,000 | £2,570 | £39,432 | £76,157 |
| £125,000 | £70 | £42,432 | £78,057 |
| £130,000 | £0 | £44,703 | £80,686 |
Try your own raise in the pay rise calculator, which shows how much of any increase actually reaches your account.
Escape route one: pension contributions
The trap is measured on adjusted net income, not salary. Pension contributions come off that figure, so paying enough into a pension to bring it back to £100,000 restores the whole allowance.
On £110,000, putting £10,000 into a pension through salary sacrifice costs you just £3,800 in take-home pay, because it saves 60% tax and 2% NI. Through a net pay scheme, where the contribution comes off before tax but after NI, it costs £4,000. Either way, £10,000 lands in your pension.
| On £110,000 | Into pension | Take-home | Real cost |
|---|---|---|---|
| No extra pension | £0 | £72,357 | £0 |
| Salary sacrifice | £10,000 | £68,557 | £3,800 |
| Net pay scheme | £10,000 | £68,357 | £4,000 |
If your pension uses relief at source, the provider adds basic rate relief and you claim the rest through a self assessment return. That claim is what lowers your adjusted net income, so do not skip it. The salary sacrifice guide compares all three methods at lower salaries.
Pension money is locked away until pension age. Only sacrifice what you will not need to spend, and check the take-home pay calculator so your monthly budget still works.
Escape route two: Gift Aid
Gift Aid donations work the same way. The charity claims basic rate tax back, so every £1 you give counts as £1.25 gross, and that gross amount comes off your adjusted net income when you claim through self assessment. To bring £110,000 back to £100,000 you would give £8,000, which the charity grosses up to £10,000. It suits people who already give regularly. As a pure tax move it makes little sense, since the money leaves your hands for good.
Scotland and other traps
Scottish taxpayers face the same taper on top of an advanced rate of 45%, so the effective rate on the band is higher. On £110,000 in Scotland you keep 31p of the next pound and take home £68,307 a year, £4,050 less than in England.
Parents meet a smaller trap earlier. The child benefit high income charge starts at £60,000 and claws back every penny by £80,000, and the same pension and Gift Aid moves cut it. Check where your own pay sits on the £100,000 after tax page and its neighbours, or read how we calculate every figure.
Pay rise calculatorHow much of a pay rise actually lands in your account. Open itQuestions people ask
At what salary does the 60% tax trap start?
At £100,000 of adjusted net income. It ends at £125,140, where the personal allowance of £12,570 has gone completely.
Is the rate really 60%?
The income tax rate on that slice is 60%. Add 2% National Insurance and an employee keeps about 38p of each extra pound.
Does a bonus count towards the trap?
Yes. Bonuses, overtime, rental profit and savings interest all count towards adjusted net income. Pension contributions and Gift Aid donations reduce it.
Why are more people caught in the trap each year?
The personal allowance of £12,570 is frozen until April 2031, and the taper still starts at £100,000. As pay rises, more salaries cross that line.
