60% tax trap calculator 2026/27
Between £100,000 and £125,140 the Personal Allowance taper means 62% of each extra pound goes in tax and NI. See how salary sacrifice changes your adjusted net income, and what each option costs.
Where the trap sits
What different sacrifices do at £110,000
Announced for April 2029
The government has announced that from April 2029, salary sacrifice above £2,000 a year will pay employee National Insurance. It is announced rather than in force. The income tax saving and the Personal Allowance rescue still work, but of a £10,000 sacrifice the £8,000 above the cap would cost about £160.00 more a year in employee National Insurance at 2%.
Common questions
What is the 60% tax trap?
Above £100,000 your tax-free Personal Allowance shrinks by £1 for every £2 of adjusted net income, until it disappears at £125,140. Losing allowance means a second £1 of pay is taxed for every £2 earned, so the tax on the pay you earned and the tax on the pay it exposes are charged together. Inside that band each extra pound costs 60p in income tax, or 62p once National Insurance is added.