2026/27 tax year (6 April 2026 to 5 April 2027).
How it works
Everyone starts with a £12,570 tax-free Personal Allowance. Once your income goes over £100,000, you lose £1 of that allowance for every £2 you earn above £100,000. By £125,140 it's gone completely.
So each extra £1 you earn in that band is taxed at 40%, and also pulls 50p of previously tax-free income into the 40% band. That's another 20p of tax, making 60%. Add 2% National Insurance and you keep about 38p.
What it means in pounds
| Salary | Personal Allowance left | Take home a year | Lost on each extra £1 |
|---|---|---|---|
| £90,000 | £12,570 | £62,757 | 42% |
| £100,000 | £12,570 | £68,557 | 62% |
| £105,000 | £10,070 | £70,457 | 62% |
| £110,000 | £7,570 | £72,357 | 62% |
| £115,000 | £5,070 | £74,257 | 62% |
| £120,000 | £2,570 | £76,157 | 62% |
| £125,140 | £0 | £78,111 | 47% |
| £130,000 | £0 | £80,686 | 47% |
England, Wales and Northern Ireland rates, no pension or student loan. In Scotland it's even higher: 67.5% tax, or about 70% with National Insurance, because the Scottish rate in this band is 45%.
How to get out of it
- Pay more into your pension. Salary sacrifice or pension contributions taken before tax reduce your "adjusted net income". If you earn £110,000 and put an extra £10,000 into your pension, you get your full allowance back. That £10,000 costs you only about £3,800 to £4,000 in take-home pay.
- Gift Aid donations also reduce adjusted net income.
- Check childcare support. Tax-Free Childcare and the 30 hours of free childcare stop if either parent's adjusted net income is over £100,000, so getting under the line can be worth thousands more.
See your own numbers in the pay rise calculator.
Sources: GOV.UK rates and thresholds 2026 to 2027, GOV.UK: income over £100,000.