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RSU & equity

RSUs and the £100,000 Tax Trap

6 min read. Last verified 22 June 2026. 2026/27 rules.

The short answer

An RSU vest is added to your salary as taxable income, so even a modest base salary plus a vest can push your adjusted net income over £100,000, the point where you start losing personal allowance and, if you have young children, Tax-Free Childcare and funded hours.

Key facts

The £100,000 trap is brutal for people with equity pay, because RSU vests are lumpy and easy to forget when you think about your income.

Why vests are dangerous near £100k

Your salary might sit comfortably below £100,000, but RSU vests are added to it as taxable income. A £90,000 salary plus £15,000 of vests is £105,000 of adjusted net income, which is over the line. You lose personal allowance at £1 for every £2 above £100,000, and if you have young children you can lose Tax-Free Childcare and funded hours entirely.

A common option: pension contribution

For many people in this position, bringing your adjusted net income back to £100,000 with a pension contribution is worth exploring. Salary sacrifice is usually the most efficient route because it also saves National Insurance. A relief-at-source pension or a Gift Aid donation reduces ANI by the same gross amount. Whether any of these makes sense depends on your circumstances -- the calculator shows what the numbers look like.

The exact contribution you need is the amount your ANI exceeds £100,000. The calculator shows it for your numbers, along with the personal allowance you reclaim.

Common questions

Do RSU vests count towards the £100,000 childcare threshold?
Yes. The vest-date value of RSUs is added to your salary as taxable income, and that total is what is tested against the £100,000 adjusted net income limit.
How do I get back under £100,000 after a vest?
A pension contribution, ideally salary sacrifice, or a Gift Aid donation reduces your adjusted net income by the gross amount. Contributing enough to cover the excess restores your personal allowance and childcare support.

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Sources

Figures verified against gov.uk and gov.scot on 30 June 2026. Constants version 2026/27.3. 2026/27 tax year. This is a modelling tool for general insight, not financial or tax advice.

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