Why it is called 60%
In that income range, each extra £2 of income can cost you £1 of Personal Allowance. The result is that part of the income is taxed at 40% and you also lose some tax-free allowance, which creates an effective 60% band for many employees.
Why it matters
- It can make the next pay rise feel much smaller than expected.
- Pension contributions and Gift Aid can sometimes push ANI back below the taper line.
- Families can also face Child Benefit drag at the same time, which makes the marginal effect even worse.
Best next pages
Use Adjusted Net Income Calculator, then Bonus / Pay Rise Calculator or Salary Sacrifice Calculator to see the effect in your own numbers.