£100k tax trap calculator: your marginal rate and what fixes it

Between £100,000 and £125,140 of adjusted net income you lose £1 of personal allowance for every £2, so each extra £1,000 is taxed at 62% once NI is included. On £110,000 with one child under 3, £10,000 of salary sacrifice (£833 a month) gets you to £100,000, cuts take-home by £3,800 and brings back £10,550 of childcare support.

Your household

Results update as you type. One earner; England, Wales or Northern Ireland rules, 2026-27.

Childcare support at stake

£10,550a year

Sacrifice £10,000 a year (£833 a month) into your pension to get back to £100,000 and keep the childcare support.

Tax-Free Childcare £2,000 plus funded hours worth £8,550. Potential value regained at £100,000 or below, subject to eligibility and timing. Universal hours are excluded.

Marginal rate: 62%of the next £1,000
You keep £380 of it.
Sacrifice to reach £100k: £10,000a year
£833 a month; £12,000 with a £2k buffer.
Better off overall: +£16,750a year
Take-home −£3,800; pension +£10,000.

What you keep if you sacrifice £10,000

Take-home change: −£3,800
Tax and NI saved: +£6,200
Childcare regained: +£10,550
Pension gained: +£10,000
Better off overall: +£16,750

Show the working

Line	Now	After
Gross pay Salary plus bonus for the tax year.	£110,000	£110,000
Adjusted net income (ANI) The figure HMRC uses for the £100k tests: taxable income after pension contributions and Gift Aid. GOV.UK	£110,000	£100,000
Personal allowance Reduced by £1 for every £2 of ANI over £100,000. GOV.UK	£7,570	£12,570
Income tax 20% / 40% / 45% on income above your personal allowance. GOV.UK	−£33,432	−£27,432
National Insurance 8% between £12,570 and £50,270, then 2%. GOV.UK	−£4,211	−£4,011
Take-home pay What lands in the bank from pay.	£72,357	£68,557
Child Benefit Paid for each child you claim for. GOV.UK	£1,407	£1,407
Child Benefit charge (HICBC) 1% of Child Benefit for every £200 of ANI over £60,000. GOV.UK	−£1,407	−£1,407
Tax-Free Childcare Lost: ANI is over £100,000. GOV.UK	£0	£2,000
Funded childcare hours (value) Working-parent hours excluded above £100,000; universal hours for the children selected are retained. GOV.UK	£0	£8,550

Tax year 2026-27. How we calculate. Guidance, not financial advice.

England childcare estimate: assumes all other eligibility conditions are met, including your partner’s income and both parents’ minimum earnings. Full Tax-Free Childcare needs £10,000 of eligible bills per child per year after funded hours, spread to use the £500 quarterly top-up. Funded hours are valued at £7.50 per hour. Universal 15 hours for the children selected remain above £100k and are excluded from the value at risk. Term dates, grace periods and disability enhancements are not modelled. Childcare assumptions. Pension contribution limits are not checked.

£110,000 salary, no pension, one child under 5. Adjusted net income £110,000.

Take the £10,000 plan with you.

One email with your numbers: the £10,000 a year, the £833 a month, the working line by line, and what to ask payroll for.

Worked example: £110,000, one child

Computed from the 2026-27 rules when this page was built. Change the household above for your own.

Childcare example: England, children aged 9 months to 2, a full year of eligible support and enough paid childcare to use the maximum top-up. Universal hours for older children reduce the amount at risk.

1Adjusted net income £110,000, so the personal allowance is reduced and the marginal rate on the next £1,000 is 62%: you keep £380 of it.
2Sacrificing £10,000 (£833 a month) brings adjusted net income to £100,000. Take-home falls by £3,800; £6,200 of tax and NI stays with you; £10,000 goes into the pension.
3Childcare support of £10,550 a year (£2,000 Tax-Free Childcare plus £8,550 of funded hours) comes back, so the household is £16,750 better off overall, counting the pension.

How it works

Adjusted net income is pay after pension contributions; it's the figure the £100,000 tests use. gov.uk/guidance/adjusted-net-income
Over £100,000 the personal allowance falls by £1 for every £2, and is gone at £125,140. gov.uk/income-tax-rates/income-over-100000
Income tax at 20%, 40% and 45% on what's left, plus NI at 8% then 2% on pay. gov.uk/income-tax-rates
Salary sacrifice comes off pay before tax and NI, so it reduces adjusted net income pound for pound. gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye

How we calculate, with every source

Questions people ask

Why is the rate 62% and not 60%?

Between £100,000 and £125,140 you pay 40% income tax on each extra £1 and lose 50p of personal allowance, which is taxed at 40% too: 60% in total. Employee National Insurance adds 2% on earnings above £50,270, giving 62% on salary.

Does the trap end at £125,140?

Yes. At £125,140 the personal allowance is fully withdrawn, so the taper stops. Above it you pay the 45% additional rate plus 2% NI: 47%, which is lower than the 62% in the band below.

Does salary sacrifice always work?

Salary sacrifice reduces adjusted net income pound for pound because the pay is never received. Your employer has to offer it, and it can affect things based on headline salary such as mortgage applications and some benefits. A personal pension contribution reduces adjusted net income by the grossed-up amount instead.

Are these the 2026-27 rules?

The calculator uses the 2026-27 rules for England, Wales and Northern Ireland, for one earner. The 2026-27 rates were checked against official sources on 10 October 2026. Results are annual estimates within the scope explained on our method page.

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