This calculator shows how the £100,000–£125,140 Personal Allowance taper works and why it can result in an effective marginal Income Tax rate of up to 60% on some types of income.
When your adjusted net income exceeds £100,000, your Personal Allowance is reduced by £1 for every additional £2 of adjusted net income.
This means that additional income can create two tax effects at the same time: the income itself may be taxable, while part of your previously tax-free Personal Allowance is also withdrawn.
How the calculator works
The calculator combines your salary, dividends and any other non-dividend income you enter, and displays:
- Whether you are within the £100,000–£125,140 Personal Allowance taper range
- How much of your Personal Allowance remains and how much has been lost
- The approximate marginal Income Tax rate on additional non-dividend income and additional dividends
- The estimated extra Income Tax caused by the withdrawal of your Personal Allowance
£100,000 tax trap calculator (2026/27)
Based on 2026/27 Income Tax rates for England, Wales and Northern Ireland. The calculator assumes no pension contributions or Gift Aid donations and excludes National Insurance, savings income and other allowances or reliefs.
Important notes and assumptions
This calculator is designed to illustrate how the Personal Allowance taper affects your Income Tax position. It should not be treated as a complete personal tax calculation.
- Adjusted net income: The calculator assumes you have no pension contributions or Gift Aid donations. In practice, these can reduce your adjusted net income and may help you avoid or reduce the Personal Allowance taper.
- 60% effective marginal rate: The often-quoted 60% rate is not an official Income Tax rate. For non-dividend income that would otherwise be taxed at 40%, an extra £2 of income can also result in £1 of Personal Allowance being withdrawn. This produces an effective marginal Income Tax rate of 60%. The effective rate on dividends can be different.
- Above £125,140: Once adjusted net income reaches £125,140, the standard Personal Allowance has been fully withdrawn and the taper no longer applies. Different tax rates may then apply depending on the type of income.
- England, Wales and Northern Ireland: The calculator uses 2026/27 Income Tax rates and bands for taxpayers in England, Wales and Northern Ireland. Scottish Income Tax rates and bands for non-dividend income are different, so this calculator should not be used for Scottish taxpayers.
For the wider tax rules, see our dividend tax guide and director salary guide. Our salary and dividend tax calculator estimates the tax due on those payments. If you are considering pension contributions, read our guide to company pension contributions.