Published UK income tax rates for 2025/26 read cleanly: nothing on the first £12,570, 20 percent to £50,270, 40 percent to £125,140, and 45 percent above that. Four bands, three thresholds, no surprises.
There is a fifth rate that does not appear in that table, and for the people it affects it is the highest marginal rate in the system.
The personal allowance is withdrawn once income passes £100,000, at £1 of allowance for every £2 of income. That withdrawal is not itself a tax, but it behaves exactly like one. Each extra £1 earned above £100,000 costs 50p of allowance, and that 50p was previously untaxed and is now taxed at 40 percent. So the extra pound is taxed at 40 percent directly, plus 40 percent on the 50p of allowance it destroyed. That is 40 plus 20, or 60 percent. Add employee National Insurance at 2 percent above the upper earnings limit and the true marginal rate on that band is 62 percent.
The band ends where the allowance runs out. Since the allowance is £12,570 and it disappears at £1 per £2, it is fully gone £25,140 above £100,000, which is £125,140. That is not a coincidence and it is not a separately chosen number: the additional-rate threshold is exactly where the taper finishes. Above it, the marginal rate drops back to 45 percent plus NI, which is lower than the band beneath it.
So the marginal rate is not monotonic. It rises from 20 to 40, spikes to 60 between £100,000 and £125,140, then falls to 45. Someone earning £125,140 faces a lower rate on their next pound than someone earning £110,000.
This is why pension contributions and salary sacrifice are discussed so much at exactly this income level. Reducing adjusted net income back below £100,000 restores allowance at the same £1-per-£2 rate, so relief inside that band is unusually effective compared with the same contribution made at a lower salary. Whether that is worth doing depends on circumstances this post knows nothing about.
National Insurance is worth separating out because it follows different rules. It is 8 percent between the primary threshold and the upper earnings limit and 2 percent above, so unlike income tax it gets lighter as earnings rise rather than heavier.
Figures are the published 2025/26 HMRC parameters, checked for band continuity, and the £125,140 threshold was confirmed by deriving it from the taper rather than taking it on trust. Scotland sets its own income tax bands and none of the income tax figures above apply there. This is not advice.
Calculators for take-home pay under these bands are at ukmoneycalc.com.