Someone on £101k a year would be losing £500 from their personal allowance. Meaning that instead of paying nothing on upto £12,500, they pay nothing on up to £12,000. They would then pay 20% of their earnings in tax on £12,000-£50,000, meaning they pay 20% more tax on £500 which is £100 for the year extra. So if we're being really technical here, they aren't paying £620 on that extra £1,000 in tax and NI, they are paying £520 because they are losing the personal allowance which the extra tax is taken off at the basic rate, not the higher rate. Looking at it in a simple way as if to say ok they pay £620 on that extra £1,000 is exactly that, the simple way to look at it. They are paying more tax within the basic rate band though, not the higher rate band. They will pay 20% on their earnings between £12k and £50k. Not an extra 20% on an extra £1,000. So the marginal tax rate is 60% but they are not actually paying or handing over 20% more of their payrise, they are handing over 10%. If you worked out the extra tax they'd pay in a year on £101k it would be £100 so 10% of their earnings above £100k, not 20%. When your personal allowance lowers, the amount of money you pay 20% tax on increases. So if they were on £100k a year, they'd pay £7,500 within the basic rate tax bracket. Once they earn £101k, they pay £7,600 within the basic rate tax bracket. The difference is affected in the basic rate tax band only, not the higher rate as it's the personal allowance that is adjusted, not their higher rate tax band. So you earn an extra £1,000 a year and give £100 more in tax due to your personal allowance dropping by £500