£100k tax trap calculator
Between £100,000 and £125,140, every £2 of adjusted net income removes £1 of Personal Allowance. Enter your income and a possible salary sacrifice to see the allowance restored, the tax and employee National Insurance saved, and the real cost to take-home pay.
The estimate covers salary sacrifice against employment income. It does not recommend a pension contribution or test pension annual allowance, minimum-wage, employer scheme, student-loan, Child Benefit or childcare rules.
Why the £100k tax trap is an effective 60% Income Tax band
The standard Personal Allowance is £12,570 in 2026/27. It falls by £1 for every £2 of adjusted net income above £100,000 and is gone at £125,140.
For someone in England, Wales or Northern Ireland, £100 of income in this range attracts £40 of higher-rate Income Tax. It also removes £50 of allowance, exposing another £50 to 40% tax: £20 more. That makes £60 Income Tax in total. Employee National Insurance can add 2%, producing a 62% combined marginal deduction before student loans or benefit cliffs.
Scotland uses different Income Tax bands, so the calculator recomputes the result when Scotland is selected. The UK-wide Personal Allowance taper still starts and ends at the same incomes.
Worked salary sacrifice examples
Each row assumes England, Wales or Northern Ireland, employment income only, and enough salary sacrifice to bring adjusted income back to £100,000. The pension receives the full sacrifice; “take-home cost” is the reduction after the Income Tax and employee NI savings.
| Starting income | Sacrifice | Allowance restored | Tax + NI saved | Take-home cost |
|---|---|---|---|---|
| £105,000 | £5,000 | £2,500 | £3,100 | £1,900 |
| £110,000 | £10,000 | £5,000 | £6,200 | £3,800 |
| £125,140 | £25,140 | £12,570 | £15,587 | £9,553 |
At £110,000, sacrificing £10,000 restores £5,000 of Personal Allowance. In England, Wales or Northern Ireland, that saves £6,000 of Income Tax and £200 of employee NI, so £10,000 reaches the pension at a £3,800 reduction in annual take-home: 62% saved.
Use adjusted net income, not just the salary on your payslip
HMRC's test uses adjusted net income. Start with taxable income from employment, pensions, property, savings and dividends, then apply the adjustments HMRC specifies. Benefits in kind and a bonus can move the figure up. Some gross pension contributions and Gift Aid can move it down. The calculator assumes the first input is that starting figure.
Salary sacrifice changes the employment contract so the employer pays less cash salary and contributes to the pension instead. The estimate therefore reduces Income Tax and employee NI. A personal relief-at-source pension contribution works differently and normally does not reduce employee NI, so it should not be entered as salary sacrifice here. Confirm what your employer offers before acting. gov.uk salary sacrifice ↗
Pension tax relief and annual allowance rules can cap or claw back the benefit. Employers must also respect National Minimum Wage rules. The salary sacrifice calculator explores ordinary salary levels; this page isolates the Personal Allowance taper.
Common questions
Does everyone earning £100,000 pay a 60% rate?
No. The taper starts only above £100,000 of adjusted net income. The effective 60% Income Tax mechanism applies to the slice where allowance is withdrawn, rather than the whole income.
Why does the trap end at £125,140?
The £12,570 allowance is removed at £1 for each complete £2 above £100,000. Losing all £12,570 therefore takes £25,140 of excess income, ending at £125,140.
Can salary sacrifice take adjusted income below £100,000?
It can reduce taxable employment pay, subject to the employer's scheme and minimum-wage rules. Other income still counts, so calculate adjusted net income across all relevant sources.