In this section: Every tax
Hidden marginal tax rates
Last updated . Figures refresh every night. How each figure is worked out.
The headline rates are 20%, 40% and 45%, but what you lose from the next pound can be far higher. Between £100,000 and £125,140 the Personal Allowance is withdrawn, so an employee loses 62% of each extra pound to income tax and National Insurance. With a Plan 2 student loan it is 71%. A parent claiming child benefit loses more than 50% between £60,000 and £80,000, and someone on universal credit keeps 32p of each extra pound as the award tapers away.
Figure as of 22 September 2026. Source: GOV.UK.
Key figures
Source: GOV.UK.
What is the short version?
- Why it happens: most are withdrawals. An allowance or a benefit is taken away as income rises, and the rate of withdrawal stacks on the tax already due; student loan repayments are collected on top in the same way.
- It reaches further each year: £100,000 has been fixed since the taper began in 2010, so the 60% band catches lower real incomes every year.
- What people do about it: pension contributions and Gift Aid reduce adjusted net income, which is why people in the band are often advised to pay into a pension.
- The child benefit charge was steeper: until April 2024 it ran from £50,000 to £60,000, twice as steep as now.
- Never above 100%: in these examples nobody loses money by earning more, but some keep 30p or less of an extra pound.
How much of a pay rise do four households lose?
Each point is the share of the next £1,000 of gross pay that does not reach the household, after income tax, employee National Insurance, student loan repayments, the child benefit charge and the universal credit taper where they apply.
The numbers behind this chart
| Year | Single, no children | Graduate repaying a Plan 2 loan | Parent of two, claiming child benefit | Single parent of two, renting, on universal credit |
|---|---|---|---|---|
£0kDetails for £0k | 0% | 0% | 0% | 0% |
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£1kDetails for £1k | 0% | 0% | 0% | 0% |
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£2kDetails for £2k | 0% | 0% | 0% | 0% |
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£3kDetails for £3k | 0% | 0% | 0% | 0% |
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£4kDetails for £4k | 0% | 0% | 0% | 0% |
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£5kDetails for £5k | 0% | 0% | 0% | 48.2% |
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£6kDetails for £6k | 0% | 0% | 0% | 55% |
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£7kDetails for £7k | 0% | 0% | 0% | 55% |
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£8kDetails for £8k | 0% | 0% | 0% | 55% |
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£9kDetails for £9k | 0% | 0% | 0% | 55% |
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£10kDetails for £10k | 0% | 0% | 0% | 55% |
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£11kDetails for £11k | 0% | 0% | 0% | 55% |
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£12kDetails for £12k | 11.9% | 11.9% | 11.9% | 60.4% |
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£13kDetails for £13k | 28% | 28% | 28% | 67.6% |
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£14kDetails for £14k | 28% | 28% | 28% | 67.6% |
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£15kDetails for £15k | 28% | 28% | 28% | 67.6% |
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£16kDetails for £16k | 28% | 28% | 28% | 67.6% |
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£17kDetails for £17k | 28% | 28% | 28% | 67.6% |
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£18kDetails for £18k | 28% | 28% | 28% | 67.6% |
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£19kDetails for £19k | 28% | 28% | 28% | 67.6% |
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£20kDetails for £20k | 28% | 28% | 28% | 67.6% |
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£21kDetails for £21k | 28% | 28% | 28% | 67.6% |
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£22kDetails for £22k | 28% | 28% | 28% | 67.6% |
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£23kDetails for £23k | 28% | 28% | 28% | 67.6% |
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£24kDetails for £24k | 28% | 28% | 28% | 67.6% |
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£25kDetails for £25k | 28% | 28% | 28% | 67.6% |
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£26kDetails for £26k | 28% | 28% | 28% | 67.6% |
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£27kDetails for £27k | 28% | 28% | 28% | 67.6% |
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£28kDetails for £28k | 28% | 28% | 28% | 67.6% |
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£29kDetails for £29k | 28% | 33.5% | 28% | 67.6% |
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£30kDetails for £30k | 28% | 37% | 28% | 67.6% |
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£31kDetails for £31k | 28% | 37% | 28% | 67.6% |
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£32kDetails for £32k | 28% | 37% | 28% | 67.6% |
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£33kDetails for £33k | 28% | 37% | 28% | 67.6% |
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£34kDetails for £34k | 28% | 37% | 28% | 67.6% |
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£35kDetails for £35k | 28% | 37% | 28% | 67.6% |
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£36kDetails for £36k | 28% | 37% | 28% | 67.6% |
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£37kDetails for £37k | 28% | 37% | 28% | 67.6% |
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£38kDetails for £38k | 28% | 37% | 28% | 67.6% |
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£39kDetails for £39k | 28% | 37% | 28% | 67.6% |
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£40kDetails for £40k | 28% | 37% | 28% | 67.6% |
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£41kDetails for £41k | 28% | 37% | 28% | 67.6% |
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£42kDetails for £42k | 28% | 37% | 28% | 67.6% |
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£43kDetails for £43k | 28% | 37% | 28% | 67.6% |
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£44kDetails for £44k | 28% | 37% | 28% | 67.6% |
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£45kDetails for £45k | 28% | 37% | 28% | 67.6% |
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£46kDetails for £46k | 28% | 37% | 28% | 67.6% |
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£47kDetails for £47k | 28% | 37% | 28% | 67.6% |
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£48kDetails for £48k | 28% | 37% | 28% | 67.6% |
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£49kDetails for £49k | 28% | 37% | 28% | 67.6% |
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£50kDetails for £50k | 38.3% | 47.3% | 38.3% | 72.2% |
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£51kDetails for £51k | 42% | 51% | 42% | 73.9% |
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£52kDetails for £52k | 42% | 51% | 42% | 73.9% |
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£53kDetails for £53k | 42% | 51% | 42% | 73.9% |
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£54kDetails for £54k | 42% | 51% | 42% | 73.9% |
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£55kDetails for £55k | 42% | 51% | 42% | 73.9% |
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£56kDetails for £56k | 42% | 51% | 42% | 73.9% |
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£57kDetails for £57k | 42% | 51% | 42% | 64.2% |
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£58kDetails for £58k | 42% | 51% | 42% | 42% |
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£59kDetails for £59k | 42% | 51% | 42% | 42% |
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£60kDetails for £60k | 42% | 51% | 53.6% | 53.6% |
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£61kDetails for £61k | 42% | 51% | 53.7% | 53.7% |
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£62kDetails for £62k | 42% | 51% | 53.7% | 53.7% |
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£63kDetails for £63k | 42% | 51% | 53.7% | 53.7% |
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£64kDetails for £64k | 42% | 51% | 53.7% | 53.7% |
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£65kDetails for £65k | 42% | 51% | 53.7% | 53.7% |
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£66kDetails for £66k | 42% | 51% | 53.7% | 53.7% |
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£67kDetails for £67k | 42% | 51% | 53.6% | 53.6% |
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£68kDetails for £68k | 42% | 51% | 53.7% | 53.7% |
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£69kDetails for £69k | 42% | 51% | 53.7% | 53.7% |
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£70kDetails for £70k | 42% | 51% | 53.7% | 53.7% |
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£71kDetails for £71k | 42% | 51% | 53.7% | 53.7% |
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£72kDetails for £72k | 42% | 51% | 53.7% | 53.7% |
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£73kDetails for £73k | 42% | 51% | 53.7% | 53.7% |
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£74kDetails for £74k | 42% | 51% | 53.7% | 53.7% |
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£75kDetails for £75k | 42% | 51% | 53.6% | 53.6% |
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£76kDetails for £76k | 42% | 51% | 53.7% | 53.7% |
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£77kDetails for £77k | 42% | 51% | 53.7% | 53.7% |
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£78kDetails for £78k | 42% | 51% | 53.7% | 53.7% |
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£79kDetails for £79k | 42% | 51% | 53.7% | 53.7% |
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£80kDetails for £80k | 42% | 51% | 42% | 42% |
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£81kDetails for £81k | 42% | 51% | 42% | 42% |
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£82kDetails for £82k | 42% | 51% | 42% | 42% |
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£83kDetails for £83k | 42% | 51% | 42% | 42% |
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£84kDetails for £84k | 42% | 51% | 42% | 42% |
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£85kDetails for £85k | 42% | 51% | 42% | 42% |
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£86kDetails for £86k | 42% | 51% | 42% | 42% |
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£87kDetails for £87k | 42% | 51% | 42% | 42% |
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£88kDetails for £88k | 42% | 51% | 42% | 42% |
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£89kDetails for £89k | 42% | 51% | 42% | 42% |
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£90kDetails for £90k | 42% | 51% | 42% | 42% |
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£91kDetails for £91k | 42% | 51% | 42% | 42% |
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£92kDetails for £92k | 42% | 51% | 42% | 42% |
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£93kDetails for £93k | 42% | 51% | 42% | 42% |
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£94kDetails for £94k | 42% | 51% | 42% | 42% |
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£95kDetails for £95k | 42% | 51% | 42% | 42% |
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£96kDetails for £96k | 42% | 51% | 42% | 42% |
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£97kDetails for £97k | 42% | 51% | 42% | 42% |
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£98kDetails for £98k | 42% | 51% | 42% | 42% |
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£99kDetails for £99k | 42% | 51% | 42% | 42% |
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£100kDetails for £100k | 62% | 71% | 62% | 62% |
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£101kDetails for £101k | 62% | 71% | 62% | 62% |
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£102kDetails for £102k | 62% | 71% | 62% | 62% |
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£103kDetails for £103k | 62% | 71% | 62% | 62% |
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£104kDetails for £104k | 62% | 71% | 62% | 62% |
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£105kDetails for £105k | 62% | 71% | 62% | 62% |
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£106kDetails for £106k | 62% | 71% | 62% | 62% |
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£107kDetails for £107k | 62% | 71% | 62% | 62% |
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£108kDetails for £108k | 62% | 71% | 62% | 62% |
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£109kDetails for £109k | 62% | 71% | 62% | 62% |
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£110kDetails for £110k | 62% | 71% | 62% | 62% |
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£111kDetails for £111k | 62% | 71% | 62% | 62% |
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£112kDetails for £112k | 62% | 71% | 62% | 62% |
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£113kDetails for £113k | 62% | 71% | 62% | 62% |
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£114kDetails for £114k | 62% | 71% | 62% | 62% |
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£115kDetails for £115k | 62% | 71% | 62% | 62% |
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£116kDetails for £116k | 62% | 71% | 62% | 62% |
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£117kDetails for £117k | 62% | 71% | 62% | 62% |
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£118kDetails for £118k | 62% | 71% | 62% | 62% |
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£119kDetails for £119k | 62% | 71% | 62% | 62% |
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£120kDetails for £120k | 62% | 71% | 62% | 62% |
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£121kDetails for £121k | 62% | 71% | 62% | 62% |
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£122kDetails for £122k | 62% | 71% | 62% | 62% |
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£123kDetails for £123k | 62% | 71% | 62% | 62% |
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£124kDetails for £124k | 62% | 71% | 62% | 62% |
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£125kDetails for £125k | 49.1% | 58.1% | 49.1% | 49.1% |
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£126kDetails for £126k | 47% | 56% | 47% | 47% |
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£127kDetails for £127k | 47% | 56% | 47% | 47% |
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£128kDetails for £128k | 47% | 56% | 47% | 47% |
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£129kDetails for £129k | 47% | 56% | 47% | 47% |
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£130kDetails for £130k | 47% | 56% | 47% | 47% |
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£131kDetails for £131k | 47% | 56% | 47% | 47% |
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£132kDetails for £132k | 47% | 56% | 47% | 47% |
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£133kDetails for £133k | 47% | 56% | 47% | 47% |
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£134kDetails for £134k | 47% | 56% | 47% | 47% |
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£135kDetails for £135k | 47% | 56% | 47% | 47% |
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£136kDetails for £136k | 47% | 56% | 47% | 47% |
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£137kDetails for £137k | 47% | 56% | 47% | 47% |
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£138kDetails for £138k | 47% | 56% | 47% | 47% |
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£139kDetails for £139k | 47% | 56% | 47% | 47% |
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£140kDetails for £140k | 47% | 56% | 47% | 47% |
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£141kDetails for £141k | 47% | 56% | 47% | 47% |
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£142kDetails for £142k | 47% | 56% | 47% | 47% |
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£143kDetails for £143k | 47% | 56% | 47% | 47% |
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£144kDetails for £144k | 47% | 56% | 47% | 47% |
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£145kDetails for £145k | 47% | 56% | 47% | 47% |
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£146kDetails for £146k | 47% | 56% | 47% | 47% |
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£147kDetails for £147k | 47% | 56% | 47% | 47% |
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£148kDetails for £148k | 47% | 56% | 47% | 47% |
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£149kDetails for £149k | 47% | 56% | 47% | 47% |
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£150kDetails for £150k | 47% | 56% | 47% | 47% |
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Figure as of 22 September 2026. Source: GOV.UK.
| Gross salary | Single, no children | Graduate repaying a Plan 2 loan | Parent of two, claiming child benefit | Single parent of two, renting, on universal credit |
|---|---|---|---|---|
£10,000Details for £10,000 | 0% | 0% | 0% | 55% |
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£20,000Details for £20,000 | 28% | 28% | 28% | 67.6% |
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£30,000Details for £30,000 | 28% | 37% | 28% | 67.6% |
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£45,000Details for £45,000 | 28% | 37% | 28% | 67.6% |
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£55,000Details for £55,000 | 42% | 51% | 42% | 73.9% |
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£65,000Details for £65,000 | 42% | 51% | 53.7% | 53.7% |
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£75,000Details for £75,000 | 42% | 51% | 53.6% | 53.6% |
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£90,000Details for £90,000 | 42% | 51% | 42% | 42% |
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£110,000Details for £110,000 | 62% | 71% | 62% | 62% |
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£130,000Details for £130,000 | 47% | 56% | 47% | 47% |
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Why is there a 60% band between £100,000 and £125,140?
Above £100,000 of adjusted net income, £1 of Personal Allowance is lost for every £2 earned. Each extra £100 is taxed at 40%, and it also removes £50 of allowance, which is then taxed at 40% too: £60 in all. Add 2% National Insurance and an employee keeps £38 of each £100. The band ends at £125,140, where the allowance reaches zero, after which the rate falls to 45% plus 2%.
- Kept £38
- Income tax at 40% on the £100 tax £40
- Income tax on the £50 of allowance withdrawn tax £20
- National Insurance at 2% tax £2
- Extra pay £100
An employee under State Pension age, rates outside Scotland.
Show as a table
| Part | Of each £100 |
|---|---|
| Kept | £38 |
| Income tax at 40% on the £100 (tax) | £40 |
| Income tax on the £50 of allowance withdrawn (tax) | £20 |
| National Insurance at 2% (tax) | £2 |
| Total: Extra pay | £100 |
Figure as of 22 September 2026. Source: GOV.UK.
Because £100,000 has been fixed since the taper began in 2010, the band reaches further down the real income scale every year. Pension contributions and Gift Aid reduce adjusted net income, which is why people in the band are often advised to pay into a pension.
See your own take-home pay, including the 60% band and student loan repayments
How does the High Income Child Benefit Charge work?
Child benefit is £27.05 a week for the eldest child and £17.90 for each other child. Once the higher earner's income passes £60,000, 1% of it is taken back through the tax system for every £200 above the threshold, until all of it has gone at £80,000. For a family with two children that is about £117 for every extra £1,000 earned, on top of 42% in tax and National Insurance.
£117
Child benefit taken back for each extra £1,000 a parent of two earns between £60,000 and £80,000, on top of £420 in tax and National Insurance.
Based on the higher earner's individual adjusted net income, not on household income. Until April 2024 the charge ran from £50,000 to £60,000, twice as steep.
How does the universal credit taper work?
Universal credit is reduced by 55p for every £1 of earnings after tax and National Insurance, once earnings pass the work allowance (£427 a month for a claimant with children who gets help with rent, £710 without). For a basic-rate taxpayer that stacks on 28% of tax and National Insurance: of each extra £1 earned, 72p is left after tax and 55% of that is withdrawn, so about 32p is kept.
- Kept 32p
- Income tax and National Insurance, 28% tax 28p
- Universal credit withdrawn, 55% of what is left tax 40p
- Extra pay 100p
Earnings above the work allowance. The withdrawn credit is not a tax, but it comes off the same pound; it is marked with the tax colour here because it is lost in the same way.
Show as a table
| Part | Of each £1, pence |
|---|---|
| Kept | 32p |
| Income tax and National Insurance, 28% (tax) | 28p |
| Universal credit withdrawn, 55% of what is left (tax) | 40p |
| Total: Extra pay | 100p |
Figure as of 22 September 2026. Source: GOV.UK.
Our example is a single parent aged 25 or over with two children, getting help with a rent of £750 a month. An assumption for the worked example, not a statistic: a modest private rent for a two-child household. Universal credit help with rent is capped by the Local Housing Allowance, which varies by area. The two-child limit on the child element was abolished from 6 April 2026.
What do student loans add on top of income tax?
A graduate on Plan 2 repays 9% of income above £29,385 a year. It is collected through PAYE like tax, so between the threshold and the higher-rate threshold the deduction from the next pound is 37% rather than 28%, and 51% rather than 42% above it. Whether that is a tax is argued on the student loans page: it stops once the loan is repaid or written off.
37%
Taken from the next pound by income tax, National Insurance and a Plan 2 repayment together, between £29,385 and the higher-rate threshold: 28% without the loan.
How is this worked out?
Every assumption behind the four examples
- Employment income only, for one earner, living outside Scotland.
- No pension contributions, salary sacrifice or other deductions, so gross pay equals adjusted net income.
- Employee National Insurance at the main and upper rates on annualised weekly thresholds, as if paid evenly all year.
- Child benefit claimed for two children where shown. The charge that claws it back is modelled at 1% per £200 of income above the threshold.
- Universal credit uses the monthly maximum award shown, which is the standard allowance and child elements plus an illustrative rent. Council tax support, childcare costs, free school meals and other passported help are left out, and each of those adds its own withdrawal.
- Student loan repayments are counted as a deduction from pay. Whether that is a tax is argued on the student loans page; it is shown here because it comes out of the same payslip.
Checked 22 September 2026. Source: GOV.UK. Checked by hand 22 September 2026.
Should marginal rates be this high?
Why withdrawals exist
- Targeting help at lower incomes means withdrawing it somewhere; a taper is how.
- A slow taper costs more, because more people stay entitled for longer.
- The allowance taper concentrates the benefit of the Personal Allowance on those below £100,000.
Why they are criticised
- Rates above 60% in the middle of the income scale can discourage extra hours or promotion.
- The thresholds are frozen, so the traps catch more people each year.
- Few people know the rates exist until they hit them.
Common questions
- What is the 60% tax trap?
- Between £100,000 and £125,140 the Personal Allowance is withdrawn at £1 for every £2 earned, so each extra pound is taxed at an effective 60%, or 62% with National Insurance.
- Does anyone lose money by earning more?
- Not in these examples: the effective rate stays below 100% everywhere. But combined withdrawals can leave someone keeping 30p or less of an extra pound.
Sources for this page
| Source | Publisher | Figures as of | Updated | Licence |
|---|---|---|---|---|
| GOV.UK, Benefit and pension rates 2026 to 2027 | GOV.UK | 22 September 2026 | annual | Open Government Licence v3.0 |
Each source's figures are used under the licence shown. Our own words, analysis, charts and derived calculations are ours, under CC BY 4.0.