Understanding the 60% Tax Band

A pay rise or extra private work can cost far more tax than you expect once your income passes £100,000. The 60% tax band has no official name and does not appear on HMRC’s rate table, but it can take most of the income you earn between £100,000 and £125,140.

This guide explains how the band works, what income counts and how doctors can check their position. The figures apply to 2026/27 and use the rates for England, Wales and Northern Ireland. Scotland has different bands and rates.

What Is the 60% Tax Band?

The rate comes from losing your Personal Allowance. Your £12,570 allowance falls by £1 for every £2 of adjusted net income above £100,000, and it reaches zero at £125,140.

Each extra £2 of income therefore has two effects. You pay 40% tax on the £2, and you lose £1 of allowance, which brings another £1 into 40% tax.

Each extra £2 between £100,000 and £125,140	Tax
40% on the £2 you earn	80p
40% on the £1 of lost allowance	40p
Total	£1.20

That is a 60% effective rate on the £2. Across the whole band, your Income Tax rises from £27,432 to £42,516. You pay £15,084 of tax on £25,140 of extra income and keep £10,056 before National Insurance.

Employees also pay Class 1 National Insurance at 2% on earnings over £967 a week, so the combined rate on salary in this band is usually 62%. Private practice profits face Class 4 instead, at 6% up to £50,270 of profit and 2% above that, so the combined rate on that income can differ. Above £125,140, the Income Tax rate falls to 45%.

The Personal Allowance will stay at £12,570 until 5 April 2031, so pay rises alone can bring you closer to this band.

What Income Counts?

The test uses adjusted net income, not your NHS salary alone. It includes your taxable income from all sources, such as:

• NHS pay after pension contributions
• Private practice and other self-employed profits
• Taxable benefits from employment
• Rental profits, savings interest and dividends

You can then deduct certain reliefs, including grossed-up Gift Aid donations and grossed-up contributions to relief at source pension schemes.

This is why NHS consultants with private work often need to check their position. A salary below £100,000 does not keep you out of the band if your other income takes the total above it.

How NHS Pension Contributions Affect the Band

The NHS Pension Scheme takes contributions from your pay before tax. If you earn £67,669 or more in pensionable pay, the member contribution rate from 1 April 2026 is 12.5%. Those contributions reduce the pay that counts towards your adjusted net income.

Do not confuse contributions with your pension input amount. Your contributions are what you pay from your salary. Your pension input amount measures the growth in your NHS benefits for Annual Allowance purposes, and it can be much larger or smaller than the amount you paid.

The income tests also differ. Adjusted net income decides your Personal Allowance, while the tapered Annual Allowance uses threshold income of £200,000 and adjusted income of £260,000. Each has its own definition, so one figure cannot answer both questions.

Worked Example: A Consultant With Private Income

This example assumes an NHS consultant in England with all £95,000 of salary pensionable, £30,000 of private practice profit and no other income.

Item	Amount
NHS salary	£95,000
Less NHS Pension contributions at 12.5%	(£11,875)
Private practice profit	£30,000
Adjusted net income	£113,125
Income above £100,000	£13,125
Personal Allowance lost	£6,562.50
Income Tax on the £13,125	£7,875

The consultant keeps £5,250 of that £13,125 before National Insurance. The Personal Allowance falls to £6,007.50, although PAYE may not reflect this until HMRC updates the tax code or the consultant files a tax return.

Other Costs Above £100,000

Adjusted net income over £100,000 can also affect childcare support. You cannot claim Tax-Free Childcare if you or your partner expect to exceed that limit in the current tax year, and the same limit applies to Free Childcare for Working Parents in England.

Tax-Free Childcare can provide up to £2,000 per child each year, or £4,000 if your child is disabled. For some parents, a small amount of income over £100,000 can matter more than the tax itself.

Ways to Reduce Exposure to the 60% Tax Band

The right approach depends on your income, your pension position and your longer-term plans.

Personal Pension Contributions

A relief at source contribution reduces adjusted net income by the grossed-up amount. In the example above, a gross contribution of £13,125 would bring adjusted net income down to £100,000.

Item	Amount
Consultant pays into the pension	£10,500
Provider claims basic rate relief	£2,625
Total added to the pension	£13,125
Extra tax reduction through Self Assessment	£5,250
Net cost after tax relief	£5,250

This only works if the contribution fits within your available Annual Allowance. Your NHS pension growth uses the same allowance, so check that figure first. An Annual Allowance charge could reduce or remove the benefit. You also cannot normally access the money until you reach minimum pension age.

Gift Aid

Each £1 you donate through Gift Aid reduces adjusted net income by £1.25. This suits doctors who already plan to give to charity.

Salary Sacrifice

A salary sacrifice arrangement reduces your cash pay, usually in return for a non-cash benefit. If your employer offers one, check how it affects your pensionable pay and any taxable benefit before you sign up.

How You Take Private Income

If you run private work through a limited company, the amount and timing of withdrawals can affect your personal income in each tax year. Company profits still face Corporation Tax, and dividends have their own rates. Our guide to income extraction for NHS consultants explains the main decisions.

How to Check Your Position Before 5 April

1. Estimate your NHS pay after pension contributions for the tax year.
2. Add private profits, rent, savings interest, dividends and taxable benefits.
3. Deduct any grossed-up Gift Aid and relief at source pension contributions.
4. Compare the result with £100,000 and £125,140.
5. Check your Annual Allowance position before you make any pension contribution.

A tax year ends on 5 April, so an early estimate leaves more time to act. You can read more in our articles on the £100,000 income tax trap and tax traps for high-earning doctors.

Your position depends on your income, pension benefits and family circumstances, so these examples are a general guide rather than individual advice. Nichols Medical Accountants can review your NHS pension and income together. Contact our team to check your figures for this tax year.