£100,000 Salary Breakdown (2025/2026)

The £100k Threshold: A Warning

Earning £100,000 is a major financial milestone, but it is also the point where the UK tax system becomes most punitive. At exactly £100,000, you retain your standard Personal Allowance (£12,570), but for every £2 you earn above this amount, you lose £1 of that tax-free allowance.

The "60% Tax Trap" Explained

Because you lose your tax-free allowance as you earn more, the effective tax rate on income between £100,000 and £125,140 is effectively 60% (40% Higher Rate Tax + 20% lost allowance). Most financial advisors recommend increasing pension contributions (Salary Sacrifice) to keep your "Adjusted Net Income" below £100k to avoid this.

Tax & National Insurance Breakdown

At exactly £100,000 (before the taper kicks in):

  • Income Tax: approx. £27,432 per year.
  • National Insurance: approx. £4,210 per year.

Student Loan Deductions

Repayments at £100,000 are very high:

  • Plan 1: ~£6,650/year (~£554/month).
  • Plan 2: ~£6,430/year (~£536/month).
  • Postgraduate: ~£4,740/year (~£395/month).