£100k Tax Trap Calculator 2026/27
Between £100,000 and £125,140 you lose your tax-free allowance, so each extra £1 is taxed at 60%. See what it costs you and how a pension gets you out.
Tax year
2026/27
2025/26
2024/25
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What is the £100k tax trap?
Everyone gets a £12,570 tax-free personal allowance until their adjusted net income goes over £100,000. Above that, the allowance shrinks by £1 for every £2 you earn, and it is gone completely at £125,140. Losing allowance means more of your income is taxed, so between £100,000 and £125,140 each extra £1 costs 40p in tax plus 20p from the lost allowance: an effective rate of 60%, or 62% with National Insurance.
How does a pension help?
Pension contributions lower your adjusted net income. Pay in enough to bring it back to £100,000 and you keep your whole allowance. Because that money would have been taxed at 60%, it costs you only about 40p for every £1 that goes into your pension, or about 38p by salary sacrifice, which also saves National Insurance. From April 2029 the National Insurance saving on salary sacrifice pension contributions is capped at £2,000 a year.
What about childcare?
If you or your partner expect adjusted net income over £100,000, you cannot get Tax-Free Childcare (worth up to £2,000 per child a year) or the free childcare hours for working parents in England. Getting under £100,000 can keep both.
What is adjusted net income?
Roughly, your total taxable income (pay, bonus, self-employment, rent, savings interest and dividends) minus pension contributions and Gift Aid donations. This calculator uses pay, bonus and pension only.
Rates last checked against gov.uk on 11 October 2026.
Sources
Income Tax rates and Personal Allowance (gov.uk) ·
Tax-Free Childcare eligibility ·
Free childcare for working parents
Please note
This is an estimate for information only and is not tax or financial advice. It does not include other income, the annual allowance for pensions or the tapered annual allowance. Think about whether you can afford to lock money away until pension age.