Why is the rate 60% when the higher rate is 40%?

Because each extra £1 of income in the taper range also withdraws 50p of personal allowance. That 50p becomes taxable as well, so £1.50 is charged at the higher rate of 40%, which is 60p of tax on £1 of income.

Is there really a 60% band in the tax tables?

No. The published rates are 20%, 40% and 45%. The 60% figure is an effective rate produced by the interaction of the higher rate with the withdrawal of the personal allowance. It does not appear in any official rate table, which is part of why it surprises people.

Where exactly does the band start and end?

It runs from £100,000 of adjusted net income, where withdrawal begins, to £125,140, where the personal allowance reaches zero and there is nothing further to withdraw. Above £125,140 the marginal rate falls back to the additional rate of 45%.

Does National Insurance make it worse?

Slightly. Employee National Insurance is charged at 2% on earnings above the upper earnings limit of £50,270, which is below the start of the taper. Adding that to the 60% income tax rate gives 62% on employment income in the band.

Is the personal allowance rounded?

Yes, and in your favour. The allowance after the taper is rounded up to the nearest pound. That is why adjusted net income of one pound over the threshold still leaves the full allowance intact: the 50p of withdrawal rounds back up.

2026/27 tax year · England, Wales and Northern Ireland

Where the 60% rate comes from

There is no 60% tax band in any HMRC rate table. It is what happens when the higher rate of 40% meets the withdrawal of the personal allowance, and it applies to a range of income that a great many people pass through.

The published rates

For 2026/27 in England, Wales and Northern Ireland, the personal allowance is £12,570. The basic rate of 20% applies to the first £37,700 of taxable income, which is income after the allowance. The higher rate of 40% applies above that up to £125,140 of taxable income, and the additional rate of 45% applies above that.

For someone with the standard allowance, the higher rate therefore begins at £50,270 of income. Nothing in that table mentions 60%.

The withdrawal

Separately from the rate table, the personal allowance is reduced once adjusted net income passes £100,000. The reduction is £1 of allowance for every £2 of income above that point. By £125,140 the whole allowance has gone, which is exactly what you would expect: £12,570 of allowance withdrawn at 50p per pound takes twice that much income to exhaust.

Putting the two together

Consider one extra pound of income earned by someone whose adjusted net income is already inside the range. That pound is itself taxable. It also removes 50p of personal allowance, and that 50p, previously untaxed, now becomes taxable too.

So £1.50 of additional income is charged to tax as a result of earning £1. At the higher rate of 40%, that is 60p of tax. The effective marginal rate on the pound is 60%.

Employee National Insurance adds to it. The upper earnings limit is £50,270, well below the start of the taper, so employment income in this range attracts National Insurance at 2%. Adding that gives 62% on employment income, which is higher than the marginal rate faced by someone earning several times as much.

A worked example

Someone with a salary of £95,000 and a single RSU vest of £15,000 has adjusted net income of £110,000. That is £10,000 into the range, so £5,000 of personal allowance is withdrawn, leaving £7,570. Income tax for the year comes to £33,432.

The same person with adjusted net income of exactly £100,000 would pay £27,432. The extra £10,000 of income has therefore cost £6,000 in income tax. Sixty pence in every pound, exactly as the arithmetic above predicts.

The calculator below isolates that figure. It computes the tax actually due and the tax that would have been due had the allowance stayed intact, and reports the difference as the cost of the taper.

See what the taper costs you

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Where do you pay income tax?

Scottish income tax rates and bands differ and are not covered by this tool.

England, Wales or Northern IrelandScotland

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Above the top of the range

Once adjusted net income passes £125,140 the allowance is gone and there is nothing further to withdraw. The marginal rate drops back to the additional rate of 45%, plus 2% National Insurance on employment income.

This produces the odd shape that makes the range notable: the marginal rate rises to 60%, stays there across the range, and then falls. Someone earning inside the range faces a higher marginal rate than someone earning considerably more.

The rounding, and why one pound over costs nothing

The allowance after the taper is rounded up to the nearest pound, in the taxpayer’s favour. Adjusted net income one pound over £100,000 withdraws 50p of allowance, which rounds back up to leave the full £12,570 intact.

This matters for a reason that has nothing to do with income tax. At the same figure, childcare eligibility ends outright. So a person one pound over the threshold has lost nothing in income tax and, if they have children in childcare, potentially thousands in support. The two rules sit at the same number and behave completely differently. That is covered in bonuses and childcare eligibility.

What reduces adjusted net income

Because the range is defined by adjusted net income rather than salary, anything that reduces that figure moves you within it. Pension contributions and Gift Aid donations are the two deductions the rules allow, and the explanation of adjusted net income covers how each is treated and how the grossing up works.

The calculator reports the gross contribution that would bring adjusted net income back to £100,000. That is arithmetic about a number, and nothing more. Whether reducing adjusted net income is sensible for you depends on your annual allowance, your age, when you need access to the money and a great deal else besides. Those are questions for a qualified adviser or an accountant.

Checking the figures

HMRC publishes the rates and the taper at gov.uk/income-tax-rates. Everything on this page is information about how those published rules work, applied to figures you entered. It is not financial, tax or investment advice, and all figures are estimates.