£50,270 — the higher rate

Income above it is taxed at 40%, and employee National Insurance drops from 8% to 2%, so the jump is 34 points rather than 20. It also removes Marriage Allowance entirely.

£60,000 — the Child Benefit charge

If anyone in the household claims Child Benefit, the charge starts here and behaves like extra income tax across a £20,000 window.

£100,000 — the 60% band

The personal allowance is withdrawn at £1 for every £2, so the effective rate between £100,000 and £125,140 is about 60%. Tax-Free Childcare and free childcare hours also stop at exactly £100,000.

A bonus can cross a threshold on its own

Bonuses are taxed with the rest of your income for the year, not separately, so a one-off payment can push a whole year's income into a higher band. Sacrificing it into a pension before it is paid is the usual answer.

I got a pay rise — why did my tax go up so much?

Crossing £50,270, £60,000 or £100,000 changes your marginal rate sharply. What each threshold costs, and what clearing it is worth.

What changes for you

£50,270 — the higher rate
Income above it is taxed at 40%, and employee National Insurance drops from 8% to 2%, so the jump is 34 points rather than 20. It also removes Marriage Allowance entirely.
£60,000 — the Child Benefit charge
If anyone in the household claims Child Benefit, the charge starts here and behaves like extra income tax across a £20,000 window.
£100,000 — the 60% band
The personal allowance is withdrawn at £1 for every £2, so the effective rate between £100,000 and £125,140 is about 60%. Tax-Free Childcare and free childcare hours also stop at exactly £100,000.
A bonus can cross a threshold on its own
Bonuses are taxed with the rest of your income for the year, not separately, so a one-off payment can push a whole year's income into a higher band. Sacrificing it into a pension before it is paid is the usual answer.

The decisions this opens up

Each works on your own figures and shows every option with the workings. Free, and no sign-up.

How can I reduce my higher-rate tax?Finds the thresholds sitting above and below your income, and shows what a pension contribution to each one is actually worth — including the 60% band and the child benefit charge.Should I sacrifice salary into my pension?Compares a salary sacrifice against paying into the same pension from taxed pay. The income tax relief is identical; the National Insurance is not, and that is the whole difference.Should I make a pension contribution?You have spare cash. This compares putting it in a pension, an ISA, or leaving it in savings — projected forward and taxed correctly at both ends.Should I keep claiming Child Benefit?Works out the High Income Child Benefit Charge on your income, what a pension contribution would save, and why opting out of the payment is almost never the right answer.

Dates this puts in your diary

Before the bonus is paidAgree any salary sacrifice — it cannot be done afterwards
5 AprilMake any pension contribution intended to reduce this year's income

Run the numbers

60 Percent Tax Trap Calculator Bonus Tax Calculator Salary Sacrifice Calculator Take Home Pay Calculator 60 Percent Tax Trap Explained

Software that files it for you

Partner links

If you keep your own books, these are the packages that handle Self Assessment and Making Tax Digital.

FreeAgent

4.8

Free optionMTD ready

The freelancer and contractor favourite, free with some bank accounts.

Free forever with a NatWest, Royal Bank of Scotland, Ulster or Mettle business account
Built-in Self Assessment and MTD for Income Tax filing

From £0 with a NatWest, RBS or Mettle account, otherwise about £19/mo

See FreeAgent

QuickBooks

4.6

MTD ready

The big all-rounder with the deepest MTD track record.

Sole Trader plan built specifically for Self Assessment and MTD
Snap and store receipts, automatic bank feeds

From about £10/mo, frequent 90% off intro offers

See QuickBooks

Xero

4.5

MTD ready

The scale-up choice once you have staff, stock or VAT.

Huge app marketplace and the accountant industry standard
Strong for VAT, payroll and multi-user limited companies

From about £15/mo

See Xero

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