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The 60% Tax Trap Optimizer
Calculate pension salary sacrifice savings and escape the £100k-£125k income tax trap. See exactly what contribution restores your full personal allowance.
Last updated: 17 May 2026
Income Details
Pension Sacrifice
You're in the 60% trap
Your income of £115,000 puts you in the £100k-£125k zone where every extra £2 earned costs £1 in lost allowance on top of 40% tax. You've lost £7,500 of your personal allowance already. Use the slider to find your escape.
The taper is costing you
£3,000
extra tax from taper
34.1%
effective rate
Sacrifice £15,000 (13.0%) to your pension to recover this in full.
Distance from the trap
£15,000 into the trap
Sacrifice £15,000 (13.0%) to escape fully
Tax breakdown
Adjust the slider above to see a full before / after breakdown.
What is the 60% Tax Trap?
Between £100,000 and £125,140, the UK tax system creates an effective tax rate of 60%. This happens because you lose £1 of Personal Allowance for every £2 earned above £100,000. That lost allowance is then taxed at 40% - creating an additional hidden 20% on top of the standard higher rate.
| Income | Personal Allowance | Allowance Lost | Effective Rate |
|---|---|---|---|
| £100,000 | £12,570 | £0 | 40% |
| £110,000 | £7,570 | £5,000 | 60% |
| £120,000 | £2,570 | £10,000 | 60% |
| £125,140 | £0 | £12,570 | 45% |
How to Rescue Your Personal Allowance
Salary sacrifice is the most tax-efficient escape. By contributing to your pension via salary sacrifice, you reduce your Adjusted Net Income before the taper is applied. Every £2 sacrificed recovers £1 of personal allowance and avoids 60p in tax.
Real example: Sarah earns £110,000. She loses £5,000 of personal allowance. If she sacrifices £10,000 to pension, her ANI drops to £100k - full allowance restored, and her pension grows by £10,000 rather than the £4,000 she'd keep after cash tax.
Why it works: Sacrifice reduces income before tax. You save 40% income tax, 2% NI, and recover allowance that was costing you an effective 20% more. Many employers also pass on their 13.8% NI saving as additional pension contribution - worth asking about.
Cash Bonus vs Pension Sacrifice
At your income of £115,000, your bonus attracts an effective rate of 52.0% - here's what that means in practice:
Taking £10,000 as cash (at £105k salary)
- Gross bonus: £10,000
- Income tax (60% effective): −£6,000
- You receive: £4,000
Sacrificing £10,000 to pension
- Pension contribution: £10,000
- Tax saved from restored allowance: £4,000+
- Pension value: £10,000
The pension is locked until age 55 (rising to 57 in 2028), but grows tax-free and 25% can be withdrawn tax-free at retirement.
How We Calculate
Step 1 - Adjusted Net Income (ANI): Gross income minus pension sacrifice. ANI = (Salary + Bonus) x (1 − Pension%).
Step 2 - Personal Allowance taper: If ANI exceeds £100,000, the £12,570 allowance reduces by £1 for every £2 over the threshold. It reaches zero at £125,140.
Step 3 - Income Tax: 20% on taxable income up to £37,700; 40% on £37,701-£125,140; 45% above £125,140. England/Wales/NI rates only.
Step 4 - National Insurance: 8% between £12,570-£50,270, then 2% above.
Data source: Based on HMRC Income Tax rates for 2026/27.
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