Once your adjusted net income passes £100,000, your Personal Allowance is reduced by £1 for every £2 you earn above that. Between £100,000 and £125,140 this creates an effective 60% tax rate (40% income tax plus the lost allowance), plus 2% NI — the "60% tax trap". Take-home on £100k is typically £66,000–68,000 a year (around £5,500/month) before pension; the exact figure depends on pension type and student loan.
Pension contributions (especially salary sacrifice) reduce your taxable income and can keep you below the taper or soften the trap. Bonuses and pay rises in this band are heavily taxed, so many people redirect extra income into pensions. Child Benefit is also tapered away via the High Income Child Benefit Charge once income exceeds £60,000. Use our calculator to see the impact of pension and bonuses on your take-home.
For a full breakdown and to model salary sacrifice or bonuses, use the links below. We also have a dedicated guide to the 60% tax trap.
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