UK 60% Tax Trap Calculator

This is the contractual amount before any deductions. If you're paid monthly, it's annualised — £8,750 × 12 = £105,000. Don't include bonus or benefits-in-kind here.

Use a realistic figure — a forecast bonus is fine. Bonuses are taxed exactly like salary at the moment of payment, including PA-taper effects.

This should be the gross % going into pension via salary sacrifice or net-pay. If you don't know — check your last payslip; the line "Pension EE" divided by gross pay × 100 is the figure.

Student loan adds 9% (or 6% PG) to your marginal rate above the threshold, pushing the trap effective rate up to 71%+. Scottish residents face slightly different bands.

The hero shows your true marginal % — what you keep on the next £1 you earn. Anything over 50% means the taper is biting.

The "Escape the trap" scenario shows the pension contribution that brings you to exactly £100,000 adjusted income. Compare net + pension across scenarios — total compensation usually rises despite "less take-home".

The marginal income-tax rate inside the taper is 60% (40% + 20% allowance loss). Add 2% NI = 62%. Add 9% student loan = 71%. Add Scottish higher-rate (42% vs 40%) = 65% baseline / 74% with student loan. The "60% trap" name describes the simplest case (40% taxpayer, no loan, rUK).

Salary-sacrifice arrangements are HMRC-approved if structured correctly: your contractual salary is reduced before payment, and the employer makes a pension contribution from the saving. They cannot be retrospective. Most large employers run an annual "lifestyle benefits" window in February-March where you can elect to sacrifice the upcoming bonus. Combined NI saving (employee 2% + employer 13.8%) often gets partially returned to you, multiplying the effective relief.

If you didn't use your full £60,000 annual allowance in the prior 3 tax years, you can carry it forward — meaning you could legitimately contribute up to £240,000 in a single year (£60k current + £60k × 3 carry-forward) provided you have the earnings to support it. Useful for one-off bonus dumps.

HMRC has anti-avoidance rules preventing you from drawing tax-free cash from one pension and immediately recycling it into another to claim more relief. The thresholds are technical (~30% of recycled amount over £7,500) — get advice if you're close to retirement and considering this.

If you're a high-earner buying property, see UK Stamp Duty 2026 and Conveyancing Fees. For broader money planning, the UK Currency Converter uses ECB live rates.