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Adjusted net income calculator

Work out income after qualifying pension and Gift Aid relief.

Free, no sign-up. AI never does the maths.

Estimated adjusted net income£110,000.00

See the working
Worked example.

After salary sacrifice; bonus below.

Why we ask
Enter your salary after salary sacrifice and net-pay pension contributions; do not add those contributions back. Your P60 taxable pay already includes any bonus: if you use that figure here, leave Bonus at £0.

Amount paid ÷ 0.8. Leave £0 for net-pay or salary sacrifice.

Why we ask

Net contribution ÷ 0.8. Net-pay and salary-sacrifice pensions already reduce your income — leave at £0.

Enter what you gave; we gross it up.

Add other income or details

Taxable profit from a trade, profession or partnership.

Rental profit after allowable expenses.

Pension and tax-computation adjustments

Taken off your salary by your employer before tax.

Why we ask
Member contributions your employer takes from your pay before tax under a net-pay arrangement, already out of the salary entered above. They use the same relief limit as the relief-at-source contribution, so they reduce the relief available to it, and, while Relevant UK earnings is left blank, they are added to the figure taken there. They are not deducted again. Exclude employer contributions.

Paid gross, no payroll or at-source relief. Enter it once, here.

Why we ask
Member contributions where you claim the relief yourself (FA 2004 s.194), such as a retirement annuity contract. Not relief-at-source contributions, even if you claim higher-rate relief on them. They were never taken off the salary entered, so they are not added back to the relevant UK earnings. They use the same relief limit and are deducted from your income here, so enter them once and do not repeat them under Other Step 1 tax reliefs. Exclude employer contributions.

Reliefs such as trading losses. Not pension contributions: they go above.

Why we ask
For example eligible trading or property losses, exactly as deducted in the tax computation. Do not enter pension contributions here: a contribution you paid gross and claim relief on goes under Contributions relieved by claim, which deducts it once; relief-at-source and net-pay contributions have their own fields.

Add back trade-union or police relief deducted at Step 1.

Why we ask
Add back relief deducted at Step 1 for qualifying trade-union or police-organisation payments, if applicable.

Illustration — worked example

Estimated adjusted net income
£110,000.00

Assumes no income beyond salary and bonus and no other reliefs or adjustments.

Total taxable income
£110,000.00
Less grossed-up Gift Aid
− £0.00
Less relief-eligible pension (RAS)
− £0.00
Estimated adjusted net income
£110,000.00

This is an estimate from the entries above. Confirm trading or property losses, pension deductions, add-backs and any other Step 1–3 adjustments against the tax computation before relying on the figure. The Step 4 add-back applies only to the specific trade-union or police-organisation relief described by HMRC.

  • Over £100,000 — personal allowance tapering and the childcare income-test cliff.
  • At or over £80,000 — full High Income Child Benefit Charge.

ITA 2007 s.58

For planning and illustration purposes only. Verify all inputs against source documents. This tool does not constitute financial or tax advice.

Print this quick illustration now. Signed-in users can add a client or file reference before saving it as a PDF. This quick illustration is not available as a saved compliance annex.

Build an adjusted net income estimate from taxable income, pension and Gift Aid relief, plus the qualifying deductions or statutory add-backs in the tax computation.

Free to use, with no sign-up. Your figures stay in this browser unless you choose to share them or send them to your workspace. Calculation methods and checks.

— Understanding the result

Adjusted net income starts with net income, then applies the deductions and add-backs in ITA 2007 s.58, including grossed-up Gift Aid and qualifying pension contributions. This calculator is an estimate from the entries supplied; the final figure should reconcile to the tax computation.

— How it's calculated

What goes in

Start with net income: all taxable income before personal allowances. Add salary, bonus, taxable benefits in kind, self-employment profit, net property income, dividends, savings interest and any other taxable income. Income taxed through PAYE counts gross.

ITA 2007 s.58 (Step 1 — net income)

What comes off

Deduct grossed-up Gift Aid (the amount you gave divided by 0.8) and grossed-up relief-at-source pension contributions (your net contribution divided by 0.8), up to the pension tax-relief limit: the greater of your relevant UK earnings and £3,600, less any net-pay or claim-relieved contributions, which use the same limit. Relief-at-source contributions above that limit get no relief and are not deducted. Net-pay and salary-sacrifice pensions already reduce your taxable income at source, so they are not deducted again here. Contributions you pay gross and claim relief on yourself (for example to a retirement annuity contract) are deducted once, in their own field. With any net-pay contributions, they get relief only up to your relevant UK earnings; if they are more, the calculator gives no figure and says why. Enter any other qualifying deduction or required statutory add-back from the tax computation separately. HMRC’s four-step adjusted net income guide describes the Step 1 reliefs and the narrow Step 4 add-back.

ITA 2007 s.58 (Steps 2–3 — Gift Aid and relief at source) ; ITA 2007 s.24(1)(a) ; FA 2004 s.194(1) (claims)

— How to work out your adjusted net income

  1. Step 1

    Add up your taxable income

    Total your salary, bonus, taxable benefits in kind, self-employment, property, dividends and savings — all gross.

  2. Step 2

    Gross up your Gift Aid

    Divide any Gift Aid donation by 0.8 to gross it up, then deduct it.

  3. Step 3

    Gross up your relief-at-source pension

    Divide your net relief-at-source contribution by 0.8 and deduct it, up to the greater of your relevant UK earnings and £3,600, less any net-pay or claim-relieved contributions, which use the same limit. Net-pay and salary-sacrifice pensions are already off your taxable pay.

  4. Step 4

    Add the remaining tax-computation adjustments

    Enter any pension contribution you paid gross and claim relief on once, under Contributions relieved by claim, then any other qualifying deduction or statutory add-back identified in the tax computation.

  5. Step 5

    Reconcile the estimate

    What remains is the adjusted net income estimate behind the £100k taper, the child benefit charge and the childcare cliff. Reconcile it before relying on it.

— Worked example

Salary £110,000 (relevant UK earnings £110,000) · gross RAS pension £8,000 · Gift Aid £800 net
Net income before ANI deductions
£110,000.00
Grossed-up Gift Aid deduction
− £1,000.00
Relief-eligible pension deduction (RAS)
− £8,000.00
Adjusted net income estimate
£101,000.00

The £800 Gift Aid payment is grossed to £1,000. The £110,000 salary is relevant UK earnings, so the whole £8,000 is within the pension relief limit; the tool takes salary, bonus, benefits and self-employment profit as relevant UK earnings unless you enter a different figure. Reconcile unusual Step 1 or Step 4 adjustments separately.

— Frequently asked questions

What is adjusted net income?

It starts with net income and then applies the deductions and add-backs in ITA 2007 s.58, including grossed-up Gift Aid and qualifying pension contributions. It drives the personal-allowance taper, HICBC and the childcare cliff; it is not simply gross salary.

Do pension contributions reduce adjusted net income?

Yes, within the tax-relief limit. A relief-at-source contribution is deducted grossed-up (net ÷ 0.8), up to the greater of your relevant UK earnings and £3,600, less any net-pay or claim-relieved contributions, which use the same limit; any amount above that gets no tax relief and is not deducted. Net-pay and salary-sacrifice contributions already reduce your taxable pay at source, so they lower the income figure without a separate deduction; contributions you claim relief on yourself are deducted once, in their own field. Within the limit, £1 of gross contribution reduces adjusted net income by £1.

Does Gift Aid reduce adjusted net income?

Yes — grossed up. A £80 donation is treated as £100 of Gift Aid and deducted in full, because the charity has reclaimed the basic-rate tax.

Why does adjusted net income matter at £100,000?

Above £100,000 the personal allowance is withdrawn at £1 for every £2 until it is nil at £125,140. The marginal rate depends on tax regime and income type: the familiar 60% figure is the rUK non-savings case, while Scottish non-savings income can differ. The £100,000 childcare income test is separate.

Which childcare support depends on adjusted net income?

Tax-Free Childcare, and the funded childcare hours for working parents in England, are not available if either parent's (or partner's) expected adjusted net income for the tax year is over £100,000. The test is applied to each parent separately, not to household income, so one parent over the limit removes the support even if the other earns much less. The High Income Child Benefit Charge works differently: it applies only when a partner's adjusted net income is over £60,000, and it is paid by whichever partner has the higher adjusted net income.

— Related