UK Take-home PayThe £100,000 tax trap
GOV.UK says the Personal Allowance goes down by £1 for every £2 of adjusted net income above £100,000, and is nil at £125,140 or more. So between those two points each extra £2 of income loses £1 of allowance, which is taxed at 40%.
The arithmetic
For each extra £1 between £100,000 and £125,140: 40p tax on the £1 itself, plus 20p tax because 50p of allowance disappears (50p × 40%), plus 2p National Insurance. That is 62p of every extra £1 and you keep 38p. A person on £110,000 has a Personal Allowance of £7,570 and keeps £72,357 of the £110,000.
| Salary | Personal Allowance | Tax and NI | Take-home a year |
|---|---|---|---|
| £99,000 | £12,570 | £31,023 | £67,977 |
| £100,000 | £12,570 | £31,443 | £68,557 |
| £105,000 | £10,070 | £34,543 | £70,457 |
| £110,000 | £7,570 | £37,643 | £72,357 |
| £115,000 | £5,070 | £40,743 | £74,257 |
| £120,000 | £2,570 | £43,843 | £76,157 |
| £125,140 | £0 | £47,029 | £78,111 |
| £126,000 | £0 | £47,434 | £78,566 |
What people do
The tax is on adjusted net income, which is income after some deductions such as pension contributions through certain schemes. Paying into a pension may reduce adjusted net income, which can restore some allowance; the rules are on GOV.UK and a pension has its own conditions, so this site does not model it.
Sources
- Income Tax rates, Personal Allowance and its reduction above £100,000, for the tax year 6 April 2026 to 5 April 2027: GOV.UK, "Income Tax rates and Personal Allowances" (gov.uk/income-tax-rates), read on 13 November 2026.
- Tax bands for England, Wales, Northern Ireland and Scotland, Class 1 employee National Insurance (category A) and student loan thresholds, 2026 to 2027: GOV.UK, "Rates and thresholds for employers 2026 to 2027" (gov.uk), read on 13 November 2026.
Rates read on 13 November 2026 from GOV.UK and apply to the tax year 6 April 2026 to 5 April 2027; after 5 April 2027 they will be out of date. This site is independent, not connected with HMRC, and gives arithmetic, not tax advice.