£100k Tax-Trap Calculator
The AbraTax £100k tax-trap calculator illustrates the effect of the Personal Allowance taper and compares Income Tax before and after an entered relief-at-source pension contribution. It does not recommend a contribution.
Who This Calculator Is For
This calculator is for:
- Employees or directors with total income approaching or above £100,000
- Contractors whose annual income is in the £100,000 to £125,140 range
- People who have received a bonus or one-off payment that pushes them above £100,000
- Anyone who wants to understand how relief-at-source pension contributions or Gift Aid affect adjusted net income
What You Need to Know
The Personal Allowance Taper
For 2025/26 and 2026/27, the standard Personal Allowance is £12,570. If adjusted net income exceeds £100,000, HMRC reduces the Personal Allowance by £1 for every £2 above that level.
This means:
- At £100,000 you have the full £12,570 allowance
- At £112,570 your Personal Allowance is reduced to £6,285
- At £125,140 your Personal Allowance is reduced to nil
For an England, Wales, or Northern Ireland taxpayer, the interaction of 40% Income Tax and the loss of Personal Allowance creates an effective 60% marginal rate on income between £100,000 and £125,140. Scottish rates differ.
What Is Adjusted Net Income?
Adjusted net income is broadly total income less specified deductions, including grossed-up relief-at-source pension contributions and Gift Aid donations. HMRC uses this figure to assess whether the taper applies, rather than gross salary alone.
How to Use the £100k Tax-Trap Calculator
- Select the tax year and where you live.
- Enter employment income, other non-savings taxable income, taxable savings interest, and dividends separately.
- Enter existing gross relief-at-source pension contributions and Gift Aid donations.
- Enter an additional net pension amount to include in the illustration.
- The calculator compares adjusted net income, Personal Allowance, and Income Tax between the two entered scenarios.
Frequently Asked Questions
Is the 60% rate official?
No. It is not a formal tax band. It describes the effective marginal rate produced by 40% Income Tax and the simultaneous loss of the Personal Allowance for an England, Wales, or Northern Ireland taxpayer.
How are pension contributions reflected in the calculation?
Pension contributions can reduce adjusted net income. The treatment depends on whether contributions are made through relief at source, net pay, or salary sacrifice. This calculator models relief-at-source contributions only. Pension limits and suitability require separate consideration.
Does this apply to Scottish taxpayers?
The Personal Allowance taper applies UK-wide, but Scottish non-savings Income Tax bands and rates differ. Select Scotland in the calculator to apply those rates; the effective marginal rate may differ from 60%.
What if a bonus increases income above £100,000?
A bonus can increase adjusted net income and reduce the Personal Allowance. Salary sacrifice and different types of pension contribution can be treated differently. This calculator models relief-at-source contributions only and does not assess availability, limits, affordability, or suitability.
Is there a charge to file a Self Assessment return as a higher earner?
There is no separate HMRC charge for filing. Whether you must file depends on your circumstances and whether the full tax can be collected through PAYE. Use HMRC's checking service or contact HMRC if unsure.
Limits of This Illustration
Pension contributions and Gift Aid donations can reduce adjusted net income. The calculator displays that relationship only for the amounts entered and does not recommend either action.
Salary sacrifice contributions are taken before tax and National Insurance are calculated, but this calculator does not model salary sacrifice or compare pension arrangements.
Pension annual allowance rules, including tapered allowance, carry forward, relevant UK earnings, and the Money Purchase Annual Allowance, can restrict contributions. These rules are not checked by the calculator.
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