How the trap works
Everyone gets a Personal Allowance of £12,570 that isn’t taxed. Once your income passes £100,000, the allowance shrinks by £1 for every £2 over. At £125,140 it’s gone.
So each extra £1 you earn in that range costs you twice:
- 40p of Income Tax on the £1 itself
- another 20p, because 50p of income that was tax-free is now taxed at 40%
That’s 60p in tax, plus 2p of National Insurance. On a £1,000 pay rise at £110,000, you keep £380.
Between £100,000 and £125,140 you lose £1 of tax-free allowance for every £2 you earn, so the 40% rate works out at 60%.
Above £125,140, the allowance has run out, and the rate drops to 45% (47% with National Insurance). So someone earning £130,000 pays a lower rate on their next pound than someone on £110,000.
What it costs at each salary
| Salary | Income Tax | National Insurance | Take-home pay |
|---|---|---|---|
| £90,000 | £23,432 | £3,810.60 | £62,757 |
| £100,000 | £27,432 | £4,010.60 | £68,557 |
| £110,000 | £33,432 | £4,210.60 | £72,357 |
| £125,140 | £42,516 | £4,513.40 | £78,111 |
England, Wales and Northern Ireland, 2026/27, with no pension. The step from £100,000 to £125,140 is £25,140 more pay, but only £9,553 more take-home.
In Scotland
Scotland’s advanced rate of 45% applies from £75,000, so in the taper the rate is 67.5%, or 69.5% with National Insurance.
How to get out of it
The taper is based on your adjusted net income: your taxable income, less pension contributions and Gift Aid donations. Bring that back down to £100,000 and you get your full allowance back.
Salary sacrifice works best. You give up some salary and your employer pays it into your pension. You save Income Tax at 60% and National Insurance at 2%:
- Income Tax £6,000 less
- No sacrifice: £33,432 £10,000 sacrificed: £27,432
- National Insurance £200 less
- No sacrifice: £4,211 £10,000 sacrificed: £4,011
£10,000 into your pension costs you £3,800
The £10,000 goes into your pension in full. Your take-home pay falls by only £3,800.
A personal pension or relief at source scheme works too. You pay in from your take-home pay, the provider adds 20%, and you claim the rest back through Self Assessment. Paying £8,000 in (£10,000 with the relief added) brings your adjusted net income down by £10,000. It costs about £4,000 once the refund comes, a little more than salary sacrifice because National Insurance isn’t saved.
Gift Aid donations work the same way: give £8,000 to charity and your adjusted net income falls by £10,000.
Some employers also let you sacrifice a bonus into your pension, which is useful if a bonus pushes you over £100,000.
Things to know:
- Pension money is locked away until 55 (57 from April 2028).
- You can pay up to £60,000 a year into pensions with tax relief, or your earnings if lower.
- Salary sacrifice can’t take your pay below the National Minimum Wage, and it lowers the salary a mortgage lender sees.
Parents: the trap can be much bigger
If you have young children, going over £100,000 of adjusted net income also ends Tax-Free Childcare and the 30 hours of free childcare in England, for the whole family, if either parent is over the limit. That can be worth thousands of pounds a year, so a small pension contribution can make a big difference.
See your own numbers
The salary calculator shows your tax at any salary, with a pension paid by salary sacrifice, net pay or relief at source. The pension calculator shows what the contributions could grow to. For all the bands, see UK income tax rates.