UK Salary Cliff Edges to Know
Salary figures where £1 extra gross costs you more than it gains you — or costs you benefits entirely.
£50,270 — Higher-rate threshold
Above this, marginal income tax jumps from 20% to 40%; NI drops from 8% to 2% (a partial offset). Net marginal rate rises from 28% to 42%.
£60,000 — Child Benefit taper starts
High Income Child Benefit Charge begins. Child Benefit is clawed back by 1% for every £200 over £60,000, fully withdrawn at £80,000. If either parent earns in this band and the household claims Child Benefit, marginal rates can effectively reach 50–60%+ depending on number of children.
£100,000 — Personal Allowance taper (the 60% trap)
£1 of Personal Allowance is removed for every £2 earned above £100,000. Between £100,000 and £125,140, the effective marginal rate is approximately 60% (40% income tax + 2% NI + 20% from losing allowance). Pension salary sacrifice is almost always the right lever here.
£125,140 — Additional rate threshold
Above this, marginal income tax is 45%. You've fully lost the personal allowance. Net marginal rate is 47% (45% + 2% NI).
Other cliff edges
- £30,000 — tax-free redundancy cap; excess is taxed as ordinary income.
- £60,000 — pension annual allowance for most earners (higher with unused allowance rollover).
- £125,140 — tapered pension annual allowance starts for very high earners.
- £200,000 "adjusted income" — pension annual allowance begins to taper in earnest.
How to negotiate around them
The most effective lever for cliffs in the £50k–£125k band is pension salary sacrifice. A higher-rate earner inside the £100k–£125,140 trap can route a bonus directly into pension and avoid the 60% effective rate entirely. Other levers: cycle-to-work and EV salary sacrifice schemes (reduce gross), bunching charitable Gift Aid into a single tax year, and timing one-off bonuses across tax years where possible. Always model the marginal rate before declining a pay rise — the right answer is almost never “don't take the money”, it's “take the money and route the slice above the cliff into pension”.
Scotland is different
Scottish taxpayers face a 42% higher rate from £43,663 (not £50,270) and a 47% top rate from £125,140. The UK-wide cliffs at £100k (Personal Allowance taper), £60k+ (Child Benefit), and pension allowance tapers still apply. Net marginal rates in Scotland's £100k–£125,140 band reach roughly 63%.