Why £100,000 to £125,140 is taxed at 60% on each extra pound (2026-27)
Between £100,000 and £125,140 of income, an extra pound of salary in England, Wales and Northern Ireland is taxed at an effective 60%, higher than the 45% additional rate that applies above £125,140. This is not a separate tax. It is the 40% higher rate plus the loss of Personal Allowance, and this guide shows where the figure comes from using the 2026-27 rules.
The rule
The Personal Allowance is £12,570. For anyone whose adjusted net income is over £100,000, it is reduced by one half of the excess, and any remaining amount that is not a whole pound is rounded up to the next whole pound (Income Tax Act 2007 section 35). GOV.UK puts it as a reduction of £1 for every £2 over £100,000, reaching nil at £125,140 (GOV.UK Income Tax rates). Adjusted net income is defined by reference to section 58 of that Act; in short it is total taxable income less certain deductions, which include gross pension contributions.
Where 60% comes from
Take a pay rise of £1,000 at £110,000. The extra £1,000 is taxed at the higher rate of 40%, which is £400. It also cuts the Personal Allowance by £500, and those £500 are now taxed at 40% too, which is £200. The total extra Income Tax is £600, or 60% of the rise. The engine gives the same answer: Income Tax at £110,000 is £33,432.00 and at £111,000 it is £34,032.00.
National Insurance is a separate charge. Above the Upper Earnings Limit of £50,270 it is 2%, so the extra £1,000 also costs £20 in National Insurance. Together that is £620 out of every extra £1,000, and you keep £380.
The numbers across the band
| Salary | Personal Allowance | Income Tax | National Insurance | Take-home per year |
|---|---|---|---|---|
| £99,000 | £12,570 | £27,032.00 | £3,990.60 | £67,977.40 |
| £100,000 | £12,570 | £27,432.00 | £4,010.60 | £68,557.40 |
| £105,000 | £10,070 | £30,432.00 | £4,110.60 | £70,457.40 |
| £110,000 | £7,570 | £33,432.00 | £4,210.60 | £72,357.40 |
| £115,000 | £5,070 | £36,432.00 | £4,310.60 | £74,257.40 |
| £120,000 | £2,570 | £39,432.00 | £4,410.60 | £76,157.40 |
| £125,140 | £0 | £42,516.00 | £4,513.40 | £78,110.60 |
| £130,000 | £0 | £44,703.00 | £4,610.60 | £80,686.40 |
Income Tax at £100,000 is £27,432.00 and at £120,000 it is £39,432.00, a rise of £12,000.00 on £20,000 of extra salary. Take-home pay goes from £68,557.40 to £76,157.40, a gain of £7,600.00. The Personal Allowance is £7,570 at £110,000, £5,000 below the full amount, and it reaches nil at £125,140 where the table shows £0.
Does more pay still mean more take-home pay?
Yes. A 62% effective rate still leaves 38p of each extra pound. Going from £100,000 to £125,140 is £25,140 of extra salary, and take-home pay rises from £68,557.40 to £78,110.60, a gain of £9,553.20, which is 38% of the extra salary. The point of the table is that the gain per pound is lower inside the band than just outside it, not that pay falls. Between £99,000 and £100,000, for example, take-home pay rises by £580.00 on £1,000 of extra salary, while between £110,000 and £115,000 it rises by £1,900.00 on £5,000.
Take-home pay figures here are before any student loan. A Plan 2 loan adds a 9% repayment on each extra pound above its threshold of £29,385, so with that loan the effective rate on each pound inside the band is higher again. The calculator shows the combined result if you choose a loan plan.
Just below and just above the band
Below £100,000 an extra £1,000 costs £400 in Income Tax at the 40% higher rate and £20 in National Insurance, so the effective rate is 42%. Inside the band it is 62% counting National Insurance. Above £125,140 the Personal Allowance has nothing left to lose, so the rate drops to 45% Income Tax plus 2% National Insurance, which is 47% in total. That is why the band is sometimes called a trap: it is the one stretch where the marginal rate is higher than the rate above it.
Scotland
Scottish taxpayers have their own rates but the Personal Allowance reduction is a UK-wide rule, so the allowance is lost in the same way. In the 2026-27 Scottish rates the advanced rate of 45% applies to income from £75,000 to £125,140. With the allowance reduction on top, an extra £1,000 at £110,000 costs £675 in Income Tax, an effective 67.5%, and £20 in National Insurance. At £130,000 the Scottish top rate of 48% applies and the extra £1,000 costs £480.
| Salary | England, Wales, NI: take-home | Scotland: take-home | Difference |
|---|---|---|---|
| £99,000 | £67,977.40 | £64,727.35 | £3,250.05 |
| £100,000 | £68,557.40 | £65,257.35 | £3,300.05 |
| £105,000 | £70,457.40 | £66,782.35 | £3,675.05 |
| £110,000 | £72,357.40 | £68,307.35 | £4,050.05 |
| £115,000 | £74,257.40 | £69,832.35 | £4,425.05 |
| £120,000 | £76,157.40 | £71,357.35 | £4,800.05 |
| £125,140 | £78,110.60 | £72,925.05 | £5,185.55 |
| £130,000 | £80,686.40 | £75,355.05 | £5,331.35 |
How the Scottish bands apply while the allowance is being reduced is not spelled out on the GOV.UK page. This site applies the bands to taxable income after the reduced allowance and lists that as unconfirmed on the Sources and rates page, so treat the Scottish figures inside the band as the least certain in this guide.
What a pension contribution does here
Gross pension contributions reduce adjusted net income, which can bring it back under £100,000 and restore some or all of the allowance. At £110,000, a 10% contribution of £11,000 through a net pay arrangement leaves adjusted net income at £99,000, below £100,000, so the full £12,570 allowance applies again. Income Tax falls from £33,432.00 to £27,032.00, and take-home pay falls from £72,357.40 to £67,757.40, which is £4,600.00 less for £11,000 going into the pension. In other words the pension takes £4,600.00 out of take-home pay rather than the full £11,000.
The same 10% through relief at source costs £8,800.00 from your pay, because the provider adds £2,200.00, and £2,200.00 of extra relief is due from HMRC. With that claimed, take-home pay is £67,757.40, the same as the net pay case. A smaller contribution only restores part of the allowance: at £105,000, a 5% contribution of £5,250.00 leaves adjusted net income at £99,750, the Personal Allowance is £12,570, and take-home pay is £68,307.40 against £70,457.40 with no pension.
This section shows arithmetic from the rules above, not a view on whether to contribute. Pension contributions are subject to annual allowances and scheme rules that this site does not model.
What is not in these figures
One job, tax code 1257L and nothing that changes it, National Insurance category A, no student loan unless the table says so, no Marriage Allowance, no savings or dividend income, no child benefit charge and no bonus taxed separately. The High Income Child Benefit Charge also depends on adjusted net income and is not included. Student loan repayments are taken on earnings, not on take-home pay, and add to the cost of each extra pound.
Try £110,000 in the calculatorSources
- Income Tax Act 2007, section 35 (Personal Allowance reduction)
- GOV.UK: Income Tax rates and Personal Allowances
- GOV.UK: Scottish Income Tax, how it works
- GOV.UK: Rates and thresholds for employers 2026 to 2027
- GOV.UK: Pension tax relief
- Every rate used, with its source and check date: Sources and rates
This calculator gives general information from the rates on the Sources page. It is not a substitute for your payslip, your tax code or HMRC, and it does not look at your personal circumstances. Rates as at 2 November 2026.