Take-home and the pension fix, by salary
| Salary | Take-home a year | Allowance left | Marginal rate | Pension to escape |
|---|---|---|---|---|
| £101,000 | £68,937 | £12,070 | 62% | £1,000 |
| £102,000 | £69,317 | £11,570 | 62% | £2,000 |
| £103,000 | £69,697 | £11,070 | 62% | £3,000 |
| £104,000 | £70,077 | £10,570 | 62% | £4,000 |
| £105,000 | £70,457 | £10,070 | 62% | £5,000 |
| £106,000 | £70,837 | £9,570 | 62% | £6,000 |
| £107,000 | £71,217 | £9,070 | 62% | £7,000 |
| £108,000 | £71,597 | £8,570 | 62% | £8,000 |
| £109,000 | £71,977 | £8,070 | 62% | £9,000 |
| £110,000 | £72,357 | £7,570 | 62% | £10,000 |
| £111,000 | £72,737 | £7,070 | 62% | £11,000 |
| £112,000 | £73,117 | £6,570 | 62% | £12,000 |
| £113,000 | £73,497 | £6,070 | 62% | £13,000 |
| £114,000 | £73,877 | £5,570 | 62% | £14,000 |
| £115,000 | £74,257 | £5,070 | 62% | £15,000 |
| £116,000 | £74,637 | £4,570 | 62% | £16,000 |
| £117,000 | £75,017 | £4,070 | 62% | £17,000 |
| £118,000 | £75,397 | £3,570 | 62% | £18,000 |
| £119,000 | £75,777 | £3,070 | 62% | £19,000 |
| £120,000 | £76,157 | £2,570 | 62% | £20,000 |
| £121,000 | £76,537 | £2,070 | 62% | £21,000 |
| £122,000 | £76,917 | £1,570 | 62% | £22,000 |
| £123,000 | £77,297 | £1,070 | 62% | £23,000 |
| £124,000 | £77,677 | £570 | 62% | £24,000 |
| £125,000 | £78,057 | £70 | 62% | £25,000 |
The allowance falls steadily to nil at £125,140, so the deduction share is heaviest just below that point. Above £125,140 the 62% band ends and the marginal rate settles to 47%.
Why the trap bites
Income tax itself does not have a 60% band. The 60% comes from two things happening together on the same pound: it is taxed at the 40% higher rate, and it also removes 50p of personal allowance, which is then taxed at 40% as well. That is 60% in income tax, and 62% once 2% National Insurance is added. Because a gross pension contribution reduces the adjusted net income the allowance is measured against, it is the most direct way out, and in this band the relief is worth 60p in the pound.
The childcare cliff
The same £100,000 line removes childcare support, and unlike the tax taper it is a cliff: one pound over and it is gone. Tax-Free Childcare, up to £2,000 a child a year, stops, and in England the funded 30 hours for a child aged 9 months to 4 years stops too. It is tested on each parent's own adjusted net income, so one parent over £100,000 costs the family both, whatever the other earns. Sources: gov.uk Tax-Free Childcare and gov.uk Free Childcare for Working Parents.
Work out your own figure
These pages assume the salary equals adjusted net income. A bonus or benefits in kind move the line. The adjusted net income calculator shows what counts, and the take-home pay calculator gives the full breakdown at any salary.