If you live in the UK and your salary crosses the £100,000 mark, you might expect to be taxed at the 40% Higher Rate. However, due to a quirk in the tax system, earnings between £100,000 and £125,140 are actually taxed at an effective rate of 60%.
Everyone in the UK gets a Personal Allowance of £12,570 (the amount you can earn tax-free). But once your income hits £100,000, the government starts taking this allowance away. For every £2 you earn over £100k, you lose £1 of your Personal Allowance.
The most common way high-earners bypass the 60% trap is through salary sacrifice pension contributions. By putting the income above £100,000 into a pension, you lower your "adjusted net income," allowing you to keep your Personal Allowance while saving for retirement.