£100k Tax Trap Calculator
Between £100,000 and £125,140, every extra £1 you earn loses you 50p of tax-free Personal Allowance on top of ordinary Income Tax — an effective 60% marginal rate (62% with National Insurance). Parents can lose thousands more in childcare support. See your exact position, and the pension move that can undo it.
Estimate only. This calculator gives estimates for information only, not tax or financial advice. Pension contribution limits (the Annual Allowance and Money Purchase Annual Allowance) and childcare eligibility rules are personal to you — check gov.uk or speak to a financial adviser before acting.
You're in the £100k tax trap zone
Between £100,000 and £125,140, every extra £1 you earn is taxed at an effective 62% once the lost Personal Allowance is counted in.
| Salary | Take-home | Marginal rate on the next £5,000 |
|---|---|---|
| £95,000 | £65,657 | — |
| £100,000 | £68,557 | 42% |
| £105,000 | £70,457 | 62% |
| £110,000 | £72,357 | 62% |
| £115,000 | £74,257 | 62% |
| £120,000 | £76,157 | 62% |
| £125,000 | £78,057 | 62% |
| £130,000 | £80,686 | 47.4% |
Earn £1 more — from exactly £100,000 to £100,001 — and with no children in childcare, you lose £0 of childcare support a year. The extra £1 of salary doesn't come close to covering it.
Contribute your £10,000 excess over £100,000 into your pension and you fully regain your Personal Allowance.
For every £1 that actually leaves your take-home pay, you get back 2.5x in pension pot value — an effective return of 150%.
- Salary sacrifice any amount over £100,000 into your pension — it's the single most effective way to neutralise the 60%+ marginal rate, since it reduces your adjusted net income directly.
- If you're expecting a bonus that would push you over £100,000, ask whether it can be paid as an employer pension contribution instead — this avoids the trap entirely rather than escaping it after the fact.
- The trap is based on "adjusted net income", which counts pension contributions and Gift Aid donations as deductions — both can bring you back under £100,000.
- Recheck every tax year — thresholds are usually frozen for several years while salaries rise, so more people fall into the trap zone each year without changing jobs.
Why £100,000-£125,140 is the UK's worst tax zone
Above £100,000 of income, you lose £1 of your tax-free Personal Allowance for every £2 you earn — so £2 of extra income is taxed at 40%, AND turns £1 of previously tax-free income taxable at 40% too, working out at an effective 60% marginal Income Tax rate (62% once the 2% National Insurance on earnings above £50,270 is added). Parents face a second, sharper cliff-edge: Tax-Free Childcare and the 30-hours-free-childcare schemes are withdrawn completely — not tapered — the moment either parent's adjusted net income passes £100,000, which for a family with two young children can be worth many thousands of pounds a year. The escape route for both is the same: pension contributions (and Gift Aid) reduce your adjusted net income, so contributing the excess over £100,000 can regain the full Personal Allowance and childcare support, often making the effective return on that contribution well over 100%.