Salary sacrifice
£3,800sacrifice £833 more a month
0% → 9.1% total; about 9.09% extraCalculator · 2026/27
The 60% tax trap calculator
If your adjusted net income (ANI) is between £100,000 and £125,140, each extra £1 you earn is taxed at an effective 60%. That also works in reverse: each £1 you put into your pension in that band saves 60p in income tax. So it costs you about 40p, or 38p through salary sacrifice.
Updated 23 October 2026 · Keep my 30 hours
Your annual figures
We check your adjusted net income (ANI).
Updates as you type. Nothing leaves your device. Rules checked 23 October 2026.
£10,000 into the 60% bandSaves £6,200 a year
In the 60% tax band
You're £10,000 into the 60% tax band. Sacrificing £833 a month into your pension costs about £317 a month and saves £6,200 in tax and National Insurance.
Raise your salary sacrifice from 0% to 9.1% of salary in total (about 9.09% extra).
Percentages use your full entered salary. Your scheme may use different pensionable pay. New total percentages are rounded up to 0.01%; pound estimates use the exact top-up.
60% tax band (£100,000 to £125,140)
Your adjusted net income (ANI)
- Salary
- £110,000
- Adjusted net income
- £110,000
- Over the £100,000 limit by
- £10,000
Tax saved: sacrifice £833 more a month (0% → 9.1% total)
- Extra pension this year
- £10,000
- Income tax and National Insurance you no longer pay
- −£6,200
- Costs you
- £3,800
Each £1 into your pension costs you about 38p
plus £10,000 more in your pension
Three ways to pay in £10,000
| Route | You pay in | Added by your provider | Back through your tax return | Real cost |
|---|---|---|---|---|
| Salary sacrifice | £833 a month0% → 9.1% total; about 9.09% extra | — | — | £3,800 |
| Workplace pension | £833 a month0% → 9.1% total; about 9.09% extra | — | — | £4,000 |
| Personal pension or SIPP | £8,000 before 5 AprilGross top-up: about 9.09% of salary | £2,000 | £4,000 | £4,000 |
Workplace pension
£4,000pay £833 more a month into your workplace pension
0% → 9.1% total; about 9.09% extraPersonal pension or SIPP
£4,000pay £8,000 into a personal pension before 5 April
Gross top-up: about 9.09% of salaryAdded by your provider: £2,000. Back through your tax return: £4,000.
Each route adds £10,000 to your pension. Real cost is what you’re out of pocket after tax relief (and National Insurance, for salary sacrifice). How we calculate
Salary sacrifice also saves National Insurance. With a workplace pension, tax relief comes through your pay. With a personal pension or SIPP you pay first; your provider adds 20% and you claim the rest on your tax return.
Income tax saved: £6,000. National Insurance saved: £200.
Pay into a personal pension or SIPP by 5 April to count for this tax year. Check your provider’s payment timing.
How we calculate
Start with salary, bonus, self-employed profit, taxable benefits and full other income. Subtract salary sacrifice and workplace pension contributions. Subtract personal pension cash and Gift Aid after multiplying each by 1.25.
We compare income tax before and after each top-up to find the tax relief. Salary sacrifice can also save National Insurance.
Scottish rates, separate savings and dividend taxes, pension limits and individual payroll arrangements need a closer check.
Read the official sourcesMore calculators
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OpenWhy the rate is 60%
Everyone starts with a £12,570 tax-free personal allowance. Once your ANI passes £100,000, you lose £1 of that allowance for every £2 you earn. By £125,140 it's gone.
So for every extra £2 you earn in this band:
- you pay 40% higher-rate tax on the £2, which is 80p
- £1 of your allowance becomes taxable at 40%, which is another 40p
That's £1.20 of tax on £2, or 60%. On salary, 2% National Insurance takes it to 62%.
These figures use rates for England, Wales and Northern Ireland. In Scotland, the 45% advanced rate makes it 67.5%.
What a pension contribution costs you
Paying into your pension lowers your ANI, which gives you back your allowance as well as saving 40% tax. The table shows how much it takes to bring ANI back to £100,000, and what that costs.
| Your ANI | Pension needed | Income tax saved | NI saved (salary sacrifice) | Costs you | Cost per £1 |
|---|---|---|---|---|---|
| £110,000 | £10,000 | £6,000 | £200 | £3,800 | 38p |
| £125,140 | £25,140 | £15,084 | £503 | £9,553 | 38p |
| £140,000 | £40,000 | £21,771 | £800 | £17,429 | 44p |
Scroll sideways to see the whole table.
Above £125,140 the saving drops to 45%. For the £140,000 earner, the first £14,860 of contribution only saves 45% plus 2% National Insurance, so it costs 53p per £1. That's why their average is 44p.
The same saving through each type of pension
How you pay in changes the cash you need and when the tax relief arrives, but not the final saving. For ANI of £110,000 and a £10,000 contribution:
| Route | You pay in | Added by your provider | Back through your tax return | Real cost |
|---|---|---|---|---|
| Salary sacrifice | £10,000 of salary | — | — | £3,800 |
| Workplace pension | £10,000 | — | — | £4,000 |
| Personal pension or SIPP | £8,000 | £2,000 | £4,000 | £4,000 |
Scroll sideways to see the whole table.
Salary sacrifice is cheapest because it also saves National Insurance. Some employers add part of their own National Insurance saving to your pension too.
With a personal pension or SIPP, you pay 80% upfront and your provider claims the basic 20% from HMRC. You then claim the rest through your tax return, or through HMRC's online service if you don't file a return.
How far down should you go?
You don't have to go all the way. Every £1 you pay in while your ANI is in the band saves 60p, so a partial contribution still helps.
Stopping at exactly £100,000 captures the whole 60% band. Each £1 below that saves 40%, or 42% through salary sacrifice. If you have children aged 11 or under, getting to £100,000 also keeps your free childcare hours and Tax-Free Childcare. Use the childcare calculator to see what that's worth to you.
Check these before you pay in
- Annual allowance: you can pay in up to £60,000 a year across all your pensions, including your employer's contributions. You may be able to carry forward unused allowance from the previous 3 tax years. A lower, tapered allowance only applies at much higher incomes: threshold income over £200,000 and adjusted income over £260,000.
- Your earnings: you only get tax relief on personal contributions up to 100% of your earnings for the year.
- Deadline: personal pension payments count in the tax year you make them. For 2026/27, that means by 5 April 2027.
- Access: pension money is locked away until your minimum pension age. That's 55 today, rising to 57 from 6 April 2028.
- Cash flow: salary sacrifice reduces your take-home pay each month. A SIPP needs the cash upfront, and the refund comes later.
If your income includes large dividends or savings interest, or you're well above £125,140, a regulated financial adviser can check the whole picture.
Questions about this calculator
Is the 60% tax trap real?
Yes. Between £100,000 and £125,140 of adjusted net income, you pay 40% income tax and lose £1 of personal allowance for every £2 you earn. Together that takes 60p of each extra £1, or 62p of extra salary once 2% National Insurance is added.
Is it worse in Scotland?
Yes. Scottish taxpayers pay the 45% advanced rate in this band, so the effective rate is 67.5%. The figures on this page use rates for England, Wales and Northern Ireland.
Does Child Benefit make it worse?
No, not in this band. The High Income Child Benefit Charge takes back all Child Benefit once adjusted net income reaches £80,000, so nothing more is lost above £100,000.
Should I bring my income below £100,000?
Getting to exactly £100,000 captures the whole 60% band. Every £1 below that saves 40% instead. If you have young children, getting to £100,000 also keeps your childcare support.
Sources
Rules checked on 23 October 2026
Read alongside
- Salary sacrifice vs relief at source for childcare
Salary sacrifice and a personal pension or SIPP can both lower your adjusted net income (ANI). Compare the same gross pension amount, then look at the cash you need and when relief arrives.
- Paying into a SIPP before 5 April to get under £100,000
Over £100,000 this tax year? Pay 80% of the excess into a SIPP by 5 April and claim the rest back. See how much cash you need and what it really costs.
- Bonus pushed you over £100,000? How to keep your free childcare
A bonus can take you over the £100,000 childcare limit. You usually only need to sacrifice part of it. See how much, what it costs and when to act.