What should you do if your income looks likely to go just over £100,000?
By Katharine, Founder, EMBR Tax
Last updated for the 2026/27 tax year · 12 July 2026
Why is just over £100,000 such a costly place to be?
Adjusted net income just over £100,000 is arguably the most expensive place on the UK income scale in 2026/27: income in the taper band faces an effective rate of around 60%, and a household with young children can also lose Tax-Free Childcare (worth up to £2,000 per child per year) and the 30 funded childcare hours. The same position is also where pension contributions and Gift Aid have their biggest effect.
This is usually the point to stop looking at salary alone and start checking adjusted net income properly.
What does a practical review checklist look like?
- Check your full expected adjusted net income for the tax year
- Review whether pension contributions could change the position
- Check whether Gift Aid donations are relevant
- Review any bonus or employer arrangement that may affect income
Put together, a parent of young children earning £101,000 can end up meaningfully worse off than at £99,000 — roughly £600 of the last £1,000 goes in tax, on top of lost childcare support that government figures value at around £7,500 per child per year.
What is the bottom line?
This is often less about one dramatic change and more about a combination of small, sensible checks before the year closes.
Frequently asked questions
Why is just over £100,000 such a costly place to be?+
Being just over £100,000 is not just about the extra income. It is the effect that small amount over the line can have on thresholds and allowances – including the Personal Allowance taper and childcare support eligibility.
What should you check if your income looks like it may exceed £100,000?+
Check your full expected adjusted net income for the tax year, review whether pension contributions could change the position, check whether Gift Aid donations are relevant, and review any bonus or employer arrangement that may affect income.
Is this about one big change or several small ones?+
It is often less about one dramatic change and more about a combination of small, sensible checks before the year closes.
Related guides
- How does the Personal Allowance taper work above £100,000?
HMRC reduces your Personal Allowance by £1 for every £2 of adjusted net income over £100,000. Find out how the taper works and how to plan around it.
- How can pension contributions reduce your adjusted net income for HMRC purposes?
Pension contributions can reduce adjusted net income for HMRC. Learn how net pay, relief at source, and salary sacrifice each affect the calculation.
- Can Gift Aid donations reduce your adjusted net income near the £100,000 threshold?
Gift Aid can reduce adjusted net income using the grossed-up amount, which may affect your Personal Allowance and childcare eligibility near £100,000.