The 60% Tax Trap: Earnings Between £100k and £125,140

Earn between £100k and £125,140 and HMRC takes 60p of every extra pound you make. Higher than the 45% additional rate. Almost nobody spots it on a payslip.

UK marginal income tax rates, 2026/27

Basic rate (£12,570 to £50,270)20%

Higher rate (£50,270 to £100,000)40%

Trap band (£100,000 to £125,140)60%

Additional rate (above £125,140)45%

The taper of the £12,570 personal allowance creates a stealth 60% marginal rate inside the £25,140 trap band.

Key takeaways

Between £100,000 and £125,140 of Adjusted Net Income, every £2 earned removes £1 of personal allowance, creating a 60% effective marginal rate

The trap is invisible on payslips: most earners do not realise they are losing tax-free income

Salary sacrifice into a pension reduces ANI directly and can claw back the full personal allowance, often for under 40p net cost per pound

Charitable Gift Aid donations and self-employed pension contributions also restore allowance at lower marginal rates