There is no 60% band in the UK income tax tables. There is a 20%, a 40% and a 45%. And yet between £100,000 and £125,140 a great many people are paying an effective 60% on every extra pound, and most of them have no idea.
It is not a conspiracy. It is arithmetic nobody advertises.
How it happens
Everyone starts with a personal allowance, the slice of income taxed at nothing, currently £12,570.
Once your adjusted net income passes £100,000, that allowance is withdrawn at £1 for every £2 you earn above the line. Earn £102,000 and you lose £1,000 of allowance. Earn £125,140 and it is gone entirely.
Now follow a single extra pound earned at £110,000. You pay 40% on the pound itself. You also lose 50p of allowance, and that 50p was previously untaxed and is now taxed at 40%, costing another 20p. Total: 60p gone from a pound.
Above £125,140 the effect stops, because there is no allowance left to take away, and the rate settles back to 45%. Which produces the strange result that the marginal rate in this band is higher than the rate paid by someone earning half a million.
What it costs in practice
The band is £25,140 wide. Earn across all of it and roughly £15,000 goes in tax that a naive reading of the tables would put at about £10,000.
A £5,000 bonus at £105,000 is worth about £2,000 after tax and National Insurance. People are often genuinely shocked by the payslip, and they usually blame payroll.
It gets sharper if you have young children. Tax-free childcare and the funded hours for three- and four-year-olds both cut out when either parent's adjusted net income goes over £100,000. Not tapered — a cliff edge. A parent on £99,000 who takes a £2,000 rise can lose thousands of pounds of childcare support and end up materially worse off than before the rise. That is one of the few places in the tax system where earning more genuinely leaves you poorer.
The way round it
The withdrawal is based on adjusted net income, and pension contributions reduce it.
Salary sacrifice is the cleanest version. You formally give up salary in exchange for a larger employer pension contribution. Your gross pay falls, so your adjusted net income falls with it, and the allowance comes back at the same £1-for-£2 rate at which it went.
Someone on £110,000 who sacrifices £10,000 into their pension gets back the £5,000 of personal allowance they had lost. The £10,000 costs them about £4,000 in take-home pay, because they were only keeping about 40p of each of those pounds anyway. They gain £10,000 in the pension. That is not a return you can get anywhere else without risk.
There is a second benefit: salary sacrifice reduces the pay National Insurance is charged on, for you and your employer. Some employers pass their saving back into your pension.
The limits are worth knowing before you act. The annual allowance caps total pension input, and it tapers for very high earners. Unused allowance from the previous three years can sometimes be carried forward. Sacrifice cannot take your pay below the national minimum wage. And the money is in a pension, which means it is not available until at least 57 — if you need it sooner, this is the wrong move regardless of the tax.
Thresholds and allowances change with each Budget. The £12,570 allowance and the £100,000 line have been frozen for several years, but check the current figures before you act on any of this. If the sums are large, take advice.
The other things that quietly move the number
Adjusted net income is not your salary. It is closer to everything you receive, less certain reliefs.
A company car adds a benefit-in-kind figure that can be thousands. Private medical cover does the same. Rental profit, dividends and savings interest all count. Gift Aid donations reduce it, which is a genuinely useful lever few people use deliberately.
Student loan repayments do not affect the tax at all, but they change what actually lands in your account, and with a postgraduate loan running alongside a Plan 2 you can be handing over another 15% at the margin.
Which is the real reason take-home pay is hard to guess: no single one of these is complicated, but there are eight of them and they interact.
Where the app comes in
UK Salary Calc exists because I got tired of web calculators that ask for a salary, ignore the pension, and hand back a confident wrong answer.
It models income tax, National Insurance and all the student loan plans, and it shows the marginal rate curve so you can see the 60% band rather than take my word for it. There is a salary sacrifice optimiser for working out what to contribute, and a bonus simulator, because bonuses are where the trap bites hardest. It can read a payslip or a P60 with the camera to save typing.
It runs on the device. Your salary is not uploaded anywhere, which felt like the obvious way to build it.