Between £100,000 and £125,140 of adjusted net income, every £2 earned costs £1 in tax — the infamous 60% trap caused by the tapering Personal Allowance. The fastest escape is pension salary sacrifice. This calculator shows exactly how much to contribute and what you save.
2026/27 figures. Personal Allowance £12,570. Higher-rate threshold £50,270. PA taper begins at £100,000 and fully removes PA by £125,140. NI: 8% up to £50,270, 2% above.
Adjust your inputs above and we'll show you the exact escape contribution.
What the 60% trap actually is
The Personal Allowance (£12,570 in 2026/27) tapers by £1 for every £2 earned above £100,000, fully eliminated at £125,140. So in the £25,140 band above £100k:
40% income tax on the slice itself
2% employee NI
Plus extra tax from losing PA — 40% × 0.5 = 20% extra effective tax
So every extra £2 of pay earned in this band only puts ~£0.80 in your bank account. Pension contributions reverse the trap: every £1 of pension contribution restores £0.50 of PA and is also tax-relieved at marginal rate.
Why pension is the dominant defence
Other ways to reduce ANI exist (Gift Aid, EIS/VCT), but pension salary sacrifice combines three savings simultaneously:
Income tax at marginal rate on the contribution itself
NI saving (only via salary sacrifice route, 2% above NI UEL)
PA restoration — extra income tax saved on the £0.50 of PA restored per £1 contributed
The combination produces an effective tax saving of 60-67% within the trap band — far better than the 40% saving on contributions made outside the trap. The same £10,000 contribution saves £4,000 of tax above £125,140 but £6,000+ within the trap zone.
Scotland figures use the 2026/27 six-band model (42% higher, 45% advanced, 48% top).
Worked examples — see the math on real numbers
How the Personal Allowance taper above £100,000 creates an effective 60% marginal tax rate — and how to escape it.
Aaron — £108,000 salary, no pension contributions yet
Salary
£108,000
Adjusted net income
£108,000
Personal Allowance after taper
£12,570 − £4,000 = £8,570
Allowance reduction
£1 lost for every £2 over £100k
The math:
On the £8,000 above £100,000: income tax 40% = £3,200
Plus PA reduction tax cost: £4,000 lost allowance × 40% = £1,600
Total tax cost on the £8,000 band: £4,800
Effective marginal rate: 60%
Plus 2% additional-rate NI: extra £160
True marginal rate including NI: 62%
Result: Aaron pays 60-62% on every £1 between £100,000 and £125,140. Putting £8,000 into pension via salary sacrifice would restore his full Personal Allowance AND save £3,200 income tax. The pension contribution effectively costs him only £3,040 net for £8,000 in his retirement pot.
Beth — £125,000 salary, fully in taper zone
Salary
£125,000
Personal Allowance after taper
~£0 (fully lost)
Current marginal rate on next £1
60%
The math:
Salary sacrifice scenario: contribute £25,000 to pension
Adjusted net income: £125,000 − £25,000 = £100,000
NI saved (employer's + employee's): ~£1,000 if salary-sacrificed
Net cost of £25,000 pension contribution: £25,000 − £15,028 − £1,000 ≈ £8,972
Result: Beth puts £25,000 in her pension at an effective net cost of about £9,000 — a 64% government top-up. The 60% trap, when escaped via pension, becomes the most generous tax break in the UK system. Sacrificing all the way to £99,999 maximises the effect.
Figures use 2026/27 UK tax-year rates and thresholds. Always verify against your specific payslip or tax statement before acting.
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