How the trap works
Everyone starts with a personal allowance of £12,570: income you pay no tax on. Above £100,000 of adjusted net income, the allowance shrinks by £1 for every £2 you earn. By £125,140 it is gone.
So each extra £100 in that range costs £40 of higher-rate tax, plus another £20 because £50 of previously tax-free income is now taxed at 40%. That is £60 of income tax on £100, a 60% rate. Add 2% National Insurance and you keep £38.
The numbers for 2026/27
Take-home pay for an employee in England, Wales or Northern Ireland with no pension or student loan:
| Salary | Personal allowance | Income tax | Take-home pay | Marginal rate |
|---|---|---|---|---|
| £90,000 | £12,570 | £23,432 | £62,757 | 42% |
| £100,000 | £12,570 | £27,432 | £68,557 | 62% |
| £105,000 | £10,070 | £30,432 | £70,457 | 62% |
| £110,000 | £7,570 | £33,432 | £72,357 | 62% |
| £120,000 | £2,570 | £39,432 | £76,157 | 62% |
| £125,140 | £0 | £42,516 | £78,111 | 47% |
| £130,000 | £0 | £44,703 | £80,686 | 47% |
What a pay rise is really worth
Going from £100,000 to £110,000 adds only £3,800 to take-home pay. The same £10,000 rise from £80,000 to £90,000 adds £5,800.
Above £125,140 the marginal rate falls back to 47% (45% tax plus 2% NI), because there is no allowance left to lose.
How to get the allowance back
The taper is based on adjusted net income, which is your income after pension contributions and Gift Aid. Lower that figure to £100,000 and the full allowance returns.
Example: on £110,000, putting £10,000 into your pension by salary sacrifice leaves take-home pay of £68,557. That is only £3,800 less than taking it as salary, for £10,000 in your pension.
Other things that reduce adjusted net income include Gift Aid donations and some trading losses. Scottish taxpayers face an even higher rate in this range because their income tax rate there is 45%.