The £100k Tax Trap: £100,000–£125,140 Explained
Between £100,000 and £125,140 of adjusted net income, the standard Personal Allowance is withdrawn by £1 for every £2 above £100,000. For England, Wales and Northern Ireland this creates an effective 60% Income Tax rate through the taper, before National Insurance and any other deductions.
Why does the £100k tax trap happen?
The standard Personal Allowance is £12,570 in 2026/27. Once adjusted net income exceeds £100,000, £1 of allowance is removed for every £2 of extra income. A higher-rate taxpayer therefore pays 40% tax on the extra income and also pays tax on the allowance being withdrawn.
Example: £110,000 salary
At £110,000 of adjusted net income, £5,000 of Personal Allowance has been withdrawn. With no pension or other adjustment, only £7,570 of the standard allowance remains. NetSlip's main calculator can model the resulting take-home pay and show how much of the next £100 reaches you.
Can pension contributions change adjusted net income?
They can, depending on the pension method. HMRC's adjusted-net-income calculation takes account of certain pension contributions, including grossed-up relief-at-source contributions. Salary sacrifice changes contractual salary before the adjusted-net-income calculation. Pension limits and individual circumstances still matter, so this is a modelling guide rather than personal tax advice.
Model your exact position
Use NetSlip to compare take-home pay, marginal deductions and pension methods using the 2026/27 rules.
Open take-home calculator£110k after tax