Adjusted Net Income Calculator, 2026/27

How this is calculated

HMRC does not test the personal allowance taper, the Child Benefit charge or pension annual allowance tapering against your salary or gross income. It uses adjusted net income, which starts with total taxable income from all sources, including employment, self-employment, dividends, rental and savings income, and then deducts gross pension contributions and grossed-up Gift Aid donations.

This matters because two people with the same salary can have very different adjusted net income if one pays more into a pension or gives more to charity, and that difference decides whether the personal allowance taper or Child Benefit charge applies at all.

The calculator takes your total income and subtracts the pension and Gift Aid figures you enter to arrive at the adjusted net income figure, then checks it against the £100,000 and Child Benefit thresholds.

Why the distinction matters

A director paid £108,000 who makes no pension contribution has an adjusted net income of £108,000 and loses part of their personal allowance. The same director making an £8,000 gross pension contribution brings adjusted net income down to £100,000 and keeps the full allowance, while also building retirement savings.

The same logic applies to the High Income Child Benefit Charge, which is assessed on the higher earner's adjusted net income, not household income, so restructuring who earns what within a couple can also change the outcome.

Getting the figure right for self-assessment

Relief-at-source pension contributions, the kind typical of most personal and workplace pensions, are grossed up automatically by the scheme, so you only need to enter what actually left your pay before deductions, not a manually adjusted figure.

Salary sacrifice contributions are different again, since they reduce your salary before tax rather than being added back, so they should not be double counted in this calculator; enter only additional personal contributions on top of any salary sacrifice already reflected in your income figure.

What is adjusted net income used for?

It decides whether the £100,000 personal allowance taper applies, whether the High Income Child Benefit Charge applies, and whether the pension annual allowance is tapered for high earners, among other income-related thresholds.

Does salary sacrifice reduce adjusted net income?

Yes, but indirectly. Salary sacrifice reduces your salary before it is even counted as income, so it lowers total income directly rather than being deducted separately as a pension contribution would be.

Are Gift Aid donations really worth including?

Yes. Donations made under Gift Aid are grossed up by 20% and deducted from total income when calculating adjusted net income, which can help bring you back under a threshold as well as securing higher-rate relief if you are a higher-rate taxpayer.

Is adjusted net income the same as taxable income on my tax return?

No. Taxable income on your return is used to calculate the tax due; adjusted net income is a separate calculation HMRC uses specifically to test these threshold-based rules, and the two figures can differ.