The trap
The 60% tax band the government won’t put in a table
There is no 60% row in any official rate table. And yet, for every pound you earn between £100,000 and £125,140, that is very close to what you pay — because a hidden mechanism removes your tax-free allowance exactly there. It is the sharpest, least-advertised edge in the whole income tax system.
The rule is quiet but brutal. Once your income passes £100,000, you lose £1 of your £12,570 personal allowance for every £2 you earn above it. That lost allowance is income that was tax-free and suddenly isn’t — so it gets taxed on top of the tax you already pay on the extra earnings. The arithmetic works out at 60p in the pound (62p once National Insurance is added), across a £25,140-wide band, before dropping back to 45% above it. A pay rise into this band can leave you barely better off — and, if you have young children, sometimes worse.
Your salary
£110,000
You're inside the 60% band.
Tax on your next £1
62%
marginal rate here
A £1,000 pay rise is worth
£380
after tax, in your hand
Pension relief here
60%
on money paid in
The marginal rate the rate tables don’t show
What the taxman takes from each extra pound as your salary rises. Notice the spike no official table prints: a 60%-plus band that appears and disappears between £100,000 and £125,140.
Between £100,000 and £125,140 every extra £2 of salary quietly removes £1 of personal allowance, which is then taxed too — so the real rate on that band is 60% (62% with National Insurance), higher than the 45% additional rate that starts above it.
The lever that undoes it
A pension contribution reduces the income the taxman counts. Put £10,000 into a pension and your adjusted income drops back to £100,000 — reclaiming your personal allowance, stepping out of the 60% band. The tax saved is £6,000, so that £10,000 of pension really costs you just £4,000 — an effective 60% relief, and the money is still yours, just saved for later. This is the single most valuable move in the UK tax code for anyone earning between £100,000 and £125,140.
For parents, it stops being a trap and becomes a cliff
The £100,000 line is also the edge of a cliff for childcare support in England. The moment your adjusted income tips one pound over it, you lose all of it — the 15 or 30 hours of funded childcare and Tax-Free Childcare (up to £2,000 per child a year) — not tapered, gone. Add the funded hours and, for a parent of two young children, that’s well over ten thousand pounds of support vanishing for a single pound of extra pay. Turn on children above and the second chart appears: your real position falls off a cliff at £100,000 and doesn’t recover for tens of thousands of pounds. Everywhere in that stretch, you’re worse off than you were at £100,000, so a pay rise, a bonus, even overtime can leave a family genuinely poorer. Almost no one is warned.
The move that undoes it
Here is the part almost nobody is told: the income the taxman counts for all of this is adjusted net income, and a pension contribution reduces it pound for pound. Contribute enough to bring yourself back to £100,000 and the personal allowance returns, the 60% band vanishes, and the childcare support comes back. Because you’re dodging a 60% charge, the pension effectively costs you 40p in the pound — and the money is still yours, just saved for later. The slider above shows the exact contribution and saving for your salary.
How these figures are calculated
The marginal rate is income tax plus employee National Insurance on the next £100 at each salary, using the 2026/27personal-allowance taper (£1 lost per £2 over £100,000, fully gone by £125,140). The “£1,000 pay rise” figures take the tax on the next £1,000 and, if that rise tips you over £100,000, subtract the childcare you lose in the same step — which is why the effective rate can exceed 100% and the pay rise can be worth less than nothing. The second chart plots take-home pay plus retained childcare, so the £100,000 cliff and the break-even income are visible directly.
Childcare loss per child is the £2,000 Tax-Free Childcare cap (exact, GOV.UK) plus an estimated £5,000 for the funded 15/30 hours — deliberately mid-range, as the funded-hours value varies widely by area and age and is far higher in London. Treat the childcare figures as illustrative and the £100,000 eligibility cliff as the firm GOV.UK rule. The pension figure is the fall in income tax when a gross contribution reduces adjusted net income back to £100,000, assuming full relief and annual- allowance headroom. Guidance, not advice.
Kept spots this the moment your numbers cross £100,000.
The dashboard finds the exact contribution to escape the trap, checks it against your annual allowance, and shows what it keeps over 20 years — alongside every other relief on your household.
Check my positionSources
- Personal allowance taper (£1 per £2 over £100,000): GOV.UK income tax rates, 2026/27.
- Tax-Free Childcare and 15/30 funded hours, £100,000 eligibility cliff: GOV.UK childcare.
- Pension tax relief and the annual allowance: GOV.UK tax on private pensions.