Earning six figures sounds like a finish line. Then you get a raise from £98k to £103k and your take-home barely twitches. Welcome to the personal allowance taper — a quirk of the UK tax system that creates a punishing marginal rate band between roughly £100,000 and £125,140. It catches high earners, senior managers, and anyone whose bonus pushes them over the line for a single tax year.
What happens at £100,000
For 2025/26, the standard personal allowance is £12,570 of tax-free income. Once your adjusted net income exceeds £100,000, that allowance is reduced by £1 for every £2 you earn above the threshold. At £125,140 the allowance hits zero — the same point where additional-rate tax (45%) begins for England/Wales/NI.
The taper does not add a new tax rate on paper. It withdraws tax-free income, which means more of your earnings are taxed at 40% (higher rate) than you might expect. That is why people talk about an effective 60% marginal rate in this zone: 40% tax on income that would have been partly sheltered by the allowance, plus 2% employee NI above £50,270 (and 8% NI only applies below that — so NI is mostly 2% in the taper band for high earners).
The 60% marginal rate — how the maths works
Imagine you earn £102,000 — £2,000 above the taper start. You lose £1,000 of personal allowance (£2,000 ÷ 2). That £1,000 now attracts 40% tax = £400 extra tax on top of the 40% on the £2,000 itself (£800). Total extra tax on £2,000 = £1,200 — a 60% effective rate before NI.
Add 2% NI on the £2,000 (£40) and the marginal bite approaches 62% on that slice. Student loans and pension choices can push it higher still.
Real numbers (England/Wales/NI, 2025/26)
A £10,000 raise from £100k to £110k adds only about £317/month take-home — not £833. You kept roughly 38% of that raise. Taper town is not a holiday destination.
Why £100k take-home is not “£8,333 a month”
Divide £100,000 by 12 and you get £8,333 — the number your brain wants. After tax and NI in 2025/26, monthly net is closer to £5,713 (~68% of gross before pension or student loan). The gap is Income Tax at higher rate on most of your income, partial loss of allowance as you approach £100k exactly (at exactly £100k the full £12,570 allowance still applies — taper starts above £100k), and NI.
At exactly £100,000 you have not lost any allowance yet. At £100,001 you lose 50p of allowance. The cliff is a slope, but it feels like a cliff when you cross from £99k to £105k in one bonus.
Bonuses and RSUs at the cliff
A £15k bonus on a £95k salary pushes total income to £110k — deep into taper. Payroll may tax the bonus at marginal rates that look alarming on a single payslip. Our bonus tax guide covers PAYE timing; the taper guide explains why the annual picture hurts.
Timing income across tax years (where legally possible) and pension planning are the usual conversations — not because you should avoid earning, but because blind negotiation at £98k vs £102k has asymmetric outcomes.
What people do about it
- Pension contributions — reduce adjusted net income if paid from gross (salary sacrifice or net-pay arrangement). A £10k pension contribution can pull £110k income back toward £100k for taper purposes
- Salary sacrifice — childcare vouchers, cycle scheme, and other benefits may help depending on eligibility (see pension sacrifice guide)
- Charitable Gift Aid — can extend basic-rate band in some cases (specialist tax advice)
- Know your number — model £95k, £100k, £105k before accepting a headline package
TaxBite’s pension slider is an estimate, not a financial plan — but it shows directionally how much taper you might avoid.
Scotland and the taper
The personal allowance taper is UK-wide — Scotland uses the same £100k threshold. Scottish Income Tax rates differ (higher/advanced bands), so absolute take-home at £100k+ may be lower than England. See Scotland vs England for side-by-side figures.
Child benefit and £100k
Separate from the allowance taper, the High Income Child Benefit Charge applies when adjusted net income exceeds £60,000 (reduced from April 2024, with full clawback dynamics changing). Above £100k you may face child benefit charges and taper — another reason adjusted net income is the number to watch, not just gross salary.
See your cliff in TaxBite
Nudge salary from £95k to £105k in the calculator and watch the Tax Bite pie turn redder. Add a pension percentage to see taper relief. Share the card — someone you know is about to discover this the hard way.
Model £105k →£100k salary page → · Pay rise guide →
Estimates only — not tax advice. Adjusted net income includes items not modelled here (rental income, dividends, etc.). Official guidance: gov.uk.