Adjusted net income calculator
Adjusted net income is total taxable income less gross pension contributions and Gift Aid donations, as defined on gov.uk. It decides the personal allowance taper above £100,000 and the High Income Child Benefit Charge above £60,000. This calculator follows the four steps in the gov.uk guidance and shows how much pension clears each threshold.
How is adjusted net income worked out?
gov.uk's adjusted net income guidance sets out four steps. Step one adds up all taxable income and takes off pension contributions paid gross and any trading losses, which gives net income. Step two takes off Gift Aid donations, grossed up so that every £1 given reduces net income by £1.25. Step three takes off relief at source pension contributions on the same grossed up basis. Step four adds back any tax relief claimed for payments to a trade union or police organisation, which is capped at £100.
| Step | Amount |
|---|---|
| Total taxable income | £70,000 |
| Less pension paid gross | £0 |
| Net income | £70,000 |
| Less Gift Aid, grossed up | £625 |
| Less relief at source pension, grossed up | £5,000 |
| Adjusted net income | £64,375 |
What does adjusted net income decide?
Two charges turn on it, and both are steep. The personal allowance is withdrawn at £1 for every £2 of adjusted net income above £100,000, and is gone entirely at £125,140, per gov.uk's page on income over £100,000. Across that band each extra £100 of income costs £60 in income tax, plus National Insurance. The High Income Child Benefit Charge applies where adjusted net income is above £60,000, at 1% of the Child Benefit for every £200 above the threshold, reaching 100% at £80,000, per gov.uk's Child Benefit tax charge page.
Both are decided by the adjusted figure, not by gross salary. That is why a pension contribution can remove a charge that a pay rise appeared to trigger. The marginal tax rate calculator shows what the next pound costs at any income, and the Child Benefit charge calculator works the charge itself in more detail.
How much pension clears each threshold?
On the figures above, adjusted net income is £4,375 above the £60,000 Child Benefit threshold. A gross pension contribution of that amount brings it back to the threshold. Through a relief at source scheme the out of pocket cost is £3,500, because the scheme reclaims the basic rate from HMRC.
A contribution has to be within the pension annual allowance and within relevant earnings to attract relief. The annual allowance calculator checks the limit, and the salary sacrifice calculator compares the two routes.
What would a worked example look like?
On £70,000 of employment income, a £4,000 relief at source pension contribution and £500 of Gift Aid, adjusted net income is £64,375. That sits £4,375 above the £60,000 threshold, so the charge on Child Benefit of £2,337 for two children is about £491, leaving £1,847. Without the pension contribution and the donation the same person would have an adjusted net income of £70,000 and a materially larger charge.
Common questions
What is adjusted net income?
Adjusted net income is total taxable income before personal allowances and after certain reliefs, chiefly gross pension contributions and Gift Aid donations, as defined on gov.uk's adjusted net income guidance. It is not the same as gross salary and it is not the same as taxable pay on a payslip.
Why does adjusted net income matter?
Two charges are decided by it, per gov.uk. The personal allowance is withdrawn at £1 for every £2 of adjusted net income above £100,000, and is nil at £125,140. The High Income Child Benefit Charge applies where adjusted net income is above £60,000, at 1% of the Child Benefit for every £200 above it, reaching 100% at £80,000.
How is adjusted net income worked out?
gov.uk sets out four steps. Add up all taxable income and take off pension contributions paid gross and any trading losses, which gives net income. Take off Gift Aid donations grossed up at £1.25 for each £1 given. Take off relief at source pension contributions grossed up the same way. Add back any tax relief claimed for payments to a trade union or police organisation, up to £100.
Does a salary sacrifice pension contribution reduce adjusted net income?
Yes, but not at the grossing up step. Salary sacrifice reduces gross pay itself, so the lower salary is what enters the calculation in the first place. A relief at source contribution is taken from pay that has already been counted, which is why it is grossed up and taken off later. Both routes reduce the final figure; the arithmetic differs.
Do dividends and savings interest count?
Yes. gov.uk includes dividends from company shares, interest on savings, rental profit, self-employment profit, most pensions in payment, trust income and foreign income in the taxable income that starts the calculation. Income inside an ISA does not count, because it is not taxable income.
How much pension would clear the Child Benefit charge?
On the figures shown, adjusted net income is £4,375 above the £60,000 threshold. A gross pension contribution of that amount would bring it to the threshold and remove the charge. Through relief at source, that costs a basic rate taxpayer £3,500 out of pocket, because the scheme reclaims the rest.
Is adjusted net income the same as the figure on my P60?
No. A P60 shows pay and tax for that employment. Adjusted net income covers every source of taxable income across the year, from every employment, self-employment, property, savings and dividends, then applies the reliefs. Somebody with one job and no other income and no pension outside payroll may find the two figures close, but they are defined differently.
What would a worked example look like?
On £70,000 of employment income, a £4,000 relief at source pension contribution and £500 of Gift Aid, adjusted net income is £64,375. That is £4,375 above the £60,000 Child Benefit threshold, so the charge on Child Benefit of £2,337 for two children is about £491, leaving £1,847.
Sources & Rate Verification
Rates verified against official statutory guidance on 6 September 2026.