Tax thresholds and childcare

The 60% tax trap and other cliff edges

Choose what you need: understand a tax threshold, work out your adjusted net income, or compare childcare quotes. The childcare comparison covers one child in England in 2026/27.

Tax region

Tax year

1. Understand a tax threshold

Choose a chart for your selected nation and tax year. Add salary or adjusted net income markers if you want to see where you sit.

Explore a threshold

Optional salary and bonus markers

Annual salary (£), optional

Known adjusted net income (£), optional

Use HMRC’s ANI definition. This is not your net take-home pay.

Bonus illustration (£)

60% is an effective rate, not a tax band

Your marginal rate is the share of your next £1 that goes in tax, plus National Insurance where included. It is not the rate on your whole salary. “Effective” includes the extra tax caused by losing tax-free allowances.

Example for England, Wales and Northern Ireland: your salary rises from £100,000 to £100,100, with no other income or adjustments.

£40 Income Tax on the extra £100 at the 40% band rate.
You also lose £50 of Personal Allowance, adding £20 to your tax bill.
£60 extra Income Tax in total; you keep £40 before NI.

That is the 60% effect shown in the taper zone. There is no separate 60% Income Tax band. For a standard employee, another £2 of NI makes the combined effective rate 62%. Student loans and other deductions are excluded.

With the standard Personal Allowance, the taper runs from £100,000 to £125,140 of adjusted net income. It does not make all your income taxable at this rate. HMRC allowance rules

The personal allowance taper

Each extra £2 of adjusted net income above the taper threshold removes £1 of Personal Allowance. The extra tax on that lost allowance creates the effective 60% rate (67.5% in Scotland) on extra income in this zone. These are not separate tax bands or rates on your whole salary.

Hover over a line, or tap to keep its details open. Keyboard: Tab to a line, then use the arrow keys. Escape closes the tooltip.

Solid line: Personal allowance

Chart figures and boundaries

The personal allowance taper
Adjusted net income (£)	Allowance (£)
£0.00	£12,570.00
£100,000.00	£12,570.00
£112,570.00	£6,285.00
£125,140.00	£0.00
£140,140.00	£0.00

Standard employee NI only; different categories and pension-age exceptions are excluded. These are tapers and rate changes, not necessarily sudden drops in take-home pay. This map is not an exhaustive benefits eligibility check.

IsMyPayRight · tax-cliffs

The personal allowance taper

2026/27 · England · standard employment assumptions

Hover over a line, or tap to keep its details open. Keyboard: Tab to a line, then use the arrow keys. Escape closes the tooltip.

Solid line: Personal allowance

Personal allowance and Child Benefit use adjusted net income.

NI uses salary and earnings periods; annual thresholds are reference equivalents.

HMRC · reviewed 23 Sep 2026 · no student loans or other benefit withdrawals

Estimate only. Not financial advice.

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The personal allowance taper
2026/27 · England · standard employment assumptions
Personal allowance: 0: 12570; 100000: 12570; 112570: 6285; 125140: 0; 140140: 0
Each extra £2 of adjusted net income above the taper threshold removes £1 of Personal Allowance. The extra tax on that lost allowance creates the effective 60% rate (67.5% in Scotland) on extra income in this zone. These are not separate tax bands or rates on your whole salary.
Personal allowance and Child Benefit use adjusted net income.
NI uses salary and earnings periods; annual thresholds are reference equivalents.
HMRC · reviewed 23 Sep 2026 · no student loans or other benefit withdrawals
Estimate only. Not financial advice.
ismypayright.co.uk/tax-cliffs

Use the full calculator for a salary or bonus take-home estimate →

2. Work out your adjusted net income

Use annual totals for one person. Apply the estimate to the threshold markers if useful.

Work out your adjusted net income

Adjusted net income (ANI) is the income figure used for the Personal Allowance taper and Child Benefit charge. It is different from the pay arriving in your bank account. Use totals for one person and one complete tax year, not just the year to date. Planner inputs stay in this page. If you apply the result and choose to share the map, the applied ANI is included in that shared link.

Annual taxable employment income (£)

Before Income Tax, after salary sacrifice and any pension taken before tax (net pay). Include bonuses and taxable job benefits not already in your pay figure. Do not use take-home pay.

Other annual taxable income (£)

Include taxable profits, pensions, rent, interest and dividends. Include interest and dividends covered by their tax-free allowances; exclude tax-exempt income such as ISA interest.

Pension payments with provider tax relief (£)

Your own payments for the year, before the provider adds its 20% relief (relief at source). For example, enter £800 if £1,000 reached the pension. Exclude employer, salary-sacrifice and net-pay contributions.

Gift Aid donations you paid (£)

Your qualifying donations for the year, before the charity claims tax relief.

Other pension payments made without tax relief (£)

Usually £0. Only qualifying personal payments made gross with no relief yet. Do not repeat payments above or pensions already deducted from taxable pay.

Assumes your pension payments and donations qualify for relief. This estimate does not check pension limits, trading losses, overseas rules or trade-union relief add-backs. For these cases, use HMRC’s full calculation. Do not deduct the same pension twice.

Sources checked 14 October 2026: HMRC adjusted net income and pension tax relief. This is not a childcare eligibility or household savings calculation.

3. Compare two childcare quotes

For one child in England in 2026/27. Use quotes after the funded hours your child keeps; each parent’s income and the other eligibility conditions matter.

Compare childcare costs around the £100,000 limit

Compare two provider quotes for one child in England in 2026/27, after any funded hours the child keeps. Each parent’s adjusted net income is checked separately for Tax-Free Childcare. Being at or below £100,000 alone does not prove eligibility. These inputs stay in this page and are not included in shared map links.

Household for both childcare scenarios

Scenario A

Scenario A: your annual adjusted net income (£)

Expected total for 2026/27. Use the income planner above if needed, not take-home pay.

Scenario A: your partner’s annual adjusted net income (£)

Each person has a separate £100,000 limit; do not add your incomes together.

Scenario A: quoted costs payable with Tax-Free Childcare (£)

One child, one full three-month entitlement period, after all retained funded hours. Ask your approved provider which remaining costs can be paid through the childcare account.

Scenario A: other quoted costs (£)

Costs you cannot pay through Tax-Free Childcare for the same child and period. Use £0 if none.

Scenario A: other Tax-Free Childcare conditions

Check work, child age, approved provider, residence and other requirements, including Universal Credit and childcare vouchers. The £100,000 income limit is checked separately here.

Scenario B

Scenario B: your annual adjusted net income (£)

Expected total for 2026/27. Use the income planner above if needed, not take-home pay.

Scenario B: your partner’s annual adjusted net income (£)

Each person has a separate £100,000 limit; do not add your incomes together.

Scenario B: quoted costs payable with Tax-Free Childcare (£)

One child, one full three-month entitlement period, after all retained funded hours. Ask your approved provider which remaining costs can be paid through the childcare account.

Scenario B: other quoted costs (£)

Costs you cannot pay through Tax-Free Childcare for the same child and period. Use £0 if none.

Scenario B: other Tax-Free Childcare conditions

Check work, child age, approved provider, residence and other requirements, including Universal Credit and childcare vouchers. The £100,000 income limit is checked separately here.

The child is confirmed eligible for the enhanced disabled-child Tax-Free Childcare cap

Only turn this on if the child meets the scheme’s disability conditions. The full-period top-up cap is £1,000 instead of £500; this does not confirm the other eligibility rules.

Both quotes cover the same childcare needs and already include all funded hours the child keeps, including universal hoursBoth scenarios cover one full three-month account entitlement period, with no top-up cap already used or opening account balance

Use the same child, childcare needs and period with stable circumstances. Use the dates from your childcare account, not an assumed calendar quarter. This is not an annual estimate. For a shortened or partly used period, an existing account balance or a change during the period, use your childcare account’s figures instead.

Ask your provider about term dates, reconfirmation and any grace period. Moving across an income limit does not mean all funded hours change immediately. Eligible-age three- and four-year-olds can retain universal hours in England. In Wales, the Childcare Offer uses a different gross-income test, not the ANI test used here.

Official guidance: Tax-Free Childcare conditions, top-ups and account periods, England working-parent hours, England universal hours, Wales, Scotland and Northern Ireland.

Why people talk about the “60% tax trap”

For 2026/27, personal allowance is withdrawn between £100,000 and £125,140 of adjusted net income. There is no 60% Income Tax band: the effective rate combines tax on extra pay with extra tax from losing Personal Allowance. It is 60% in England, Wales and Northern Ireland, or 67.5% in Scotland, under standard salary-only assumptions. It applies to extra income in the taper zone, not your entire salary. Employee NI can add 2 percentage points.

The Child Benefit charge uses the higher-income partner’s adjusted net income and whole £200 steps from £60,000 to £80,000. A salary marker cannot account for all pension relief, other income or Gift Aid. Follow the HMRC sources when checking your own adjusted net income.

See our 2026/27 analysis of what a £1,000 pay rise leaves after deductions for worked comparisons across salary levels, tax regions and loan plans, with downloadable figures and assumptions.

Sources and assumptions

Standard employee National Insurance and employment income only. England is the default; Scotland has different income-tax bands. Tax years run from 6 April to 5 April. Estimates do not replace your tax code, payslip or HMRC assessment.

Methodology reviewed 23 September 2026. Results are estimates, not financial advice.