Marginal tax rate calculator
Your marginal rate is what the next £1 costs you, not the average across your whole salary. This plots that rate across every salary, so you can see the 60% band above £100,000, the Child Benefit charge, the Scottish spike and what a pension contribution does to all of them.
Your marginal rate across every salary
The line is what the next £1 costs at each salary. The shaded stretches are the traps, where the rate jumps above the headline band rates.
Income tax, employee National Insurance, any student loan and the High Income Child Benefit Charge, all on the next £1. The Child Benefit charge is legally collected in 1% steps for each £200 of income, and is drawn here as the smooth average of those steps.
Every band and what your next £1 really costs
| Salary band | What the next £1 pays | Rate |
|---|---|---|
| £0 to £12,570 | Nothing. This slice is below both the personal allowance and the National Insurance threshold. | 0% |
| £12,570 to £50,270 | 20% income tax, plus 8% National Insurance | 28% |
| £50,270 to £100,000 | 40% income tax, plus 2% National Insurance | 42% |
| £100,000 to £125,140 | 40% income tax, plus 20% from the personal allowance being taken away, plus 2% National Insurance | 62% |
| £125,140 and above | 45% income tax, plus 2% National Insurance | 47% |
England, Wales and Northern Ireland rates for 2026/27, with no children, no student loan and no pension contribution.
Why the 60% band exists
There is no 60% rate in any tax table. It is what happens when two rules meet.
The first rule is the personal allowance: the first £12,570 you earn carries no income tax. The second rule takes it away again. For every £2 you earn above £100,000, £1 of that allowance is withdrawn, so by £125,140 there is none of it left.
Put the two together and an extra £1 of salary above £100,000 does two things at once. The pound itself is taxed at 40%, costing 40p. It also removes 50p of allowance, and that 50p was tax free and is now taxed at 40%, costing another 20p. Total: 60p of income tax on a single extra pound. Add 2% National Insurance and 62p of your next pound is gone.
The odd part is what sits above it. Once the allowance is fully gone at £125,140, there is nothing left to withdraw, so the rate drops to the 45% additional rate plus 2% National Insurance, which is 47%. Someone on £130,000 keeps more of their next pound than someone on £105,000.
How to get out of the trap
The allowance is worked out on adjusted net income, not on your headline salary, and a gross pension contribution reduces adjusted net income pound for pound. Contribute the amount by which you sit above £100,000 and the allowance comes back in full.
On a £110,000 salary, £10,000 of your income sits above £100,000. A gross pension contribution of £10,000 brings your adjusted net income back to £100,000 and restores your whole personal allowance. That contribution saves £6,000 of income tax, so £10,000 goes into your pension for a real cost of about £4,000, which is 40p in the pound.
Two practical notes. Salary sacrifice does the same job and also saves employee National Insurance, so ask your employer whether their scheme offers it. And the annual allowance caps what you can put in with tax relief at £60,000 a year for most people, less if your income is high enough to taper it, though unused allowance from the previous three years can often be carried forward.
Marginal is not the same as effective
The effective rate is the total tax and National Insurance you pay divided by your whole salary. It is always lower than your marginal rate, because the first slices of your income are charged at 0% and 20%. On £110,000 the effective rate is about 34% while the marginal rate is 62%.
Which one matters depends on the question. For "how much do I take home", use the effective rate. For "is this pay rise worth the extra hours", "should I take the bonus as pension" or "what is overtime really paying me", only the marginal rate answers it.
Common questions
What is the 60% tax trap?
Above £100,000 your £12,570 personal allowance is cut by £1 for every £2 you earn. So an extra £1 of salary is taxed at 40%, and it also drags 50p of previously tax-free allowance into the 40% band, which costs another 20p. That is 60p of income tax on every extra pound. Add 2% National Insurance and the real rate on that slice is 62%. The allowance is gone by £125,140, and above that the rate falls back to 47%.
Why is a £100,000 salary poor value?
Nothing goes wrong at exactly £100,000. The problem is the £25,140 above it, which is the worst value pay in the UK system: 62p of every pound goes in income tax and National Insurance, against 42p just below and 47p just above. Parents lose considerably more, because £100,000 of adjusted net income also ends the 30 free childcare hours and Tax-Free Childcare outright, and that is a cliff edge rather than a taper.
Should I put my bonus in my pension?
If the bonus falls in the £100,000 to £125,140 band, the answer for most people is yes. A gross pension contribution there attracts 60% income tax relief, so £10,000 in the pension costs about £3,800 of take-home pay, and salary sacrifice saves employee National Insurance on top. The same logic applies between £60,000 and £80,000 if you claim Child Benefit. The trade-off is access: pension money is locked until 55, rising to 57 in 2028.
What is my marginal tax rate?
Your marginal rate is what the next pound costs, not the average across your whole salary. Someone on £110,000 in England pays about 34% of their salary in income tax and National Insurance overall, but 62% on the next pound. The average is what you have paid; the marginal rate is what a pay rise, a bonus or overtime is worth. They are rarely the same number.
Why did my pay rise leave me with so little?
A rise is taxed entirely at your marginal rate, because it sits on top of everything you already earn. A £5,000 rise from £48,000 crosses the £50,270 higher rate threshold, so part of it is taxed at 28% and the rest at 42%. Cross £100,000 and 62% of the rise disappears. Student loan repayments take another 9% of the whole rise, and the Child Benefit charge can take more again.
How much do I need to pay into a pension to get under £100,000?
Exactly the amount your adjusted net income sits above £100,000, as a gross contribution. On £115,000 with no other contributions that is £15,000. Because the whole contribution comes out of the 60% band, it saves £9,000 of income tax, so the real cost of putting £15,000 into your pension is about £6,000. Use the calculator above to get the figure for your own salary.
Do I pay 60% tax in Scotland?
Scotland's version of the trap is steeper. The advanced rate is 45%, so losing 50p of allowance for every extra pound makes the income tax rate 67.5% between £100,000 and £125,140, or 69.5% with National Insurance. Scotland also has a second oddity lower down: the 42% higher rate starts at £43,662, below the £50,270 National Insurance upper earnings limit, so pay between those two figures is charged at 50%, and the marginal rate then falls to 44% above £50,270.
Does Child Benefit change my marginal tax rate?
Yes, if you claim it and your adjusted net income is between £60,000 and £80,000. The High Income Child Benefit Charge takes back 1% of your Child Benefit for every £200 over £60,000, which works out at roughly 7p in the pound for one child, 12p for two and 16p for three. On top of 40% tax and 2% National Insurance, a parent of three in that band keeps only about 42p of each extra pound.
Sources
- gov.uk: Income Tax rates and Personal Allowances
- gov.uk: Work out your adjusted net income
- gov.uk: National Insurance rates and category letters
- gov.uk: High Income Child Benefit Charge
- gov.uk: Repaying your student loan, what you pay
- gov.uk: Tax relief on private pension contributions
- mygov.scot: Current Scottish income tax rates