Tools · Tax
60% Tax Trap Calculator
If you earn between £100,000 and £125,140 you pay an effective 60% tax on that slice of income. See your real marginal rate, and exactly how much to pay into your pension to escape it.
2026/27 tax year · England, Wales & Northern Ireland
How the 60% tax trap works
Everyone gets a tax-free personal allowance, £12,570 in 2026/27. But once your income passes £100,000, HMRC removes £1 of that allowance for every £2 you earn. It's gone completely at £125,140.
So on every extra £1 in that band you pay 40% income tax on the pound itself, and you lose 50p of allowance which is then taxed at 40% (another 20p). That's 60p of tax on £1, a 60% effective marginal rate, or about 62% once you add 2% National Insurance.
How to escape it
The cleanest fix is to bring your adjusted net income back down to £100,000, usually by paying the excess into a pension. Because you're reclaiming lost allowance, the effective relief is roughly 60% (more via salary sacrifice, which also saves NI). Related: our salary sacrifice calculator and bonus tax calculator, and the full explainer, the 60% tax trap and the legal way out.
Frequently asked questions
Does the 60% trap apply in Scotland?
The personal-allowance taper applies UK-wide, but Scotland sets its own income-tax bands, so the exact marginal rate differs. This calculator uses England, Wales & Northern Ireland rates.
What counts as "adjusted net income"?
Broadly, your total taxable income less grossed-up pension contributions and Gift Aid. Salary-sacrifice pension contributions reduce it directly because they lower your gross pay.
Is salary sacrifice better than a personal pension contribution?
For escaping the trap, salary sacrifice is usually most efficient because it also saves the 2% employee NI. Personal (relief-at-source) contributions still restore the allowance but don't save NI.
Get the free Compound Playbook
Every core tip from Compound distilled into one clear PDF. Enter your email and we will send it straight over.
Free PDF. By requesting it, you agree we can email you the guide plus occasional tips and offers. Unsubscribe anytime. See our Privacy Policy.