UK · 2026/27 tax year

The 60% Tax Trap Escape Calculator

Earn over £100,000 and a hidden 60% marginal rate quietly eats your pay. See exactly what it costs you, and the precise pension contribution that escapes it.

Your position
—
Where you sit
£0£50k£100k£125k£150k
Below the trap 60% trap zone (£100k–£125,140) 45% additional rate
Your escape route

Ready to act on this?

The contribution above only works if you actually make it. Compare pension providers, or speak to a regulated adviser if your situation is complex (bonuses, multiple income sources, the annual allowance taper).

Compare SIPP providers Find an FCA-regulated adviser
This is just the headline
The trap rarely travels alone. See your full position — child benefit, the £100k childcare cliff, annual allowance taper and more — in the complete HENRY calculator.
Open HENRY →
Why is the rate 60% and not 40%?
Above £100,000 you lose £1 of your £12,570 tax-free Personal Allowance for every £2 you earn. That lost £1 becomes taxable at 40%, on top of the 40% you already pay on the £2 itself. The combined effect is 60p of tax on every extra £2, an effective 60% marginal rate. Add 2% employee National Insurance and it is closer to 62%. Oddly, this middle band is taxed harder than the 45% additional rate above £125,140.
How does a pension contribution escape it?
HMRC decides your Personal Allowance using your adjusted net income, which is your income minus gross pension contributions and Gift Aid. Paying into a pension lowers that figure. Bring it back to £100,000 and your full allowance is restored, reversing the taper. Inside the trap zone, every £1 you contribute is relieved at roughly 60%, so the real cost to you is far lower than the headline amount.
What counts towards the £100,000?
Adjusted net income includes salary, bonuses, self-employed profit, rental income, dividends above the £500 allowance, and savings interest above your allowance. It is reduced by gross personal pension contributions and Gift Aid donations. Employer pension contributions do not count as your income, and salary sacrifice reduces your taxable salary directly, which is why it is such an effective lever here.
Not financial advice. This is an educational tool that applies published HMRC rules for the 2026/27 tax year (England, Wales and Northern Ireland). It assumes employee earnings and does not model Scottish income tax bands, the pension annual allowance taper, or every income type. Figures are estimates, rounded, and may not reflect your full circumstances. Check official guidance at gov.uk or speak to a qualified, FCA-regulated adviser before acting.