Is adjusted net income the same as gross pay?

No. Gross pay is one input to it. Adjusted net income takes your total taxable income from every source, including bonus, RSU vests, rental profit, savings interest and dividends, and then deducts grossed-up pension contributions paid under relief at source and grossed-up Gift Aid donations.

How do I gross up a pension contribution or a Gift Aid donation?

Divide the amount you actually paid by 0.8. A £4,000 payment under relief at source is a £5,000 gross deduction, because the scheme reclaims basic rate tax on your behalf and adds it to the pot. Gift Aid works the same way when calculating adjusted net income.

Does salary sacrifice reduce adjusted net income?

Yes, but by a different route. Salary sacrifice reduces your contractual gross pay, so the sacrificed amount is never income in the first place and never enters the calculation. That is why it also reduces National Insurance, which net pay and relief at source contributions do not.

Which thresholds use adjusted net income?

The personal allowance taper between £100,000 and £125,140, eligibility for Tax-Free Childcare and the 30 funded hours at £100,000, and the High Income Child Benefit Charge, which has its own separate thresholds. Each rule tests the same figure against a different number.

Where can I check the official definition?

HMRC publishes the definition and the order of the steps in its guidance on adjusted net income at gov.uk/guidance/adjusted-net-income. That guidance is the source used here, and any figure that matters should be checked against it.

2026/27 tax year · England, Wales and Northern Ireland

Adjusted net income, step by step

Every threshold in this part of the tax system is tested against adjusted net income. It is not the number on your payslip, and it is not the total on your P60. Here is how it is built up, and where people lose track of it.

Why this figure exists

HMRC needed one consistent measure of income to test several different rules against. Adjusted net income is that measure. It appears in the withdrawal of the personal allowance above £100,000, in eligibility for Tax-Free Childcare and the 30 funded hours at £100,000, and in the High Income Child Benefit Charge.

Because those rules matter so much at the margins, the arithmetic of the figure itself is worth getting right. It is the thing people most often get wrong, usually in the direction of assuming their salary is the number that counts.

Step one: total taxable income

Start by adding up everything taxable for the year:

Salary, after deducting any salary sacrifice. Sacrifice reduces your contractual gross pay, so the sacrificed amount is not income and never enters the calculation.
Less net pay pension contributions. Under a net pay arrangement your employer deducts the contribution before calculating tax, so it reduces the income charged to tax.
Plus RSU vests at their market value on the vest date, for vests falling between 6 April 2026 and 5 April 2027.
Plus bonus, gross, in the year it is paid.
Plus other taxable income: rental profit, savings interest above the applicable allowances, dividends, and anything else chargeable.

Step two: deduct grossed-up relief at source contributions

Personal pension contributions paid under relief at source come out of money you have already been taxed on. The scheme reclaims basic rate tax from HMRC and adds it to your pot, so the contribution that actually reaches the pension is larger than the amount that left your bank account.

Adjusted net income deducts the gross figure. Divide what you paid by 0.8: a £4,000 payment is a £5,000 deduction. Using £4,000 instead is a £1,000 error, and near a threshold £1,000 can be the whole question.

Step three: deduct grossed-up Gift Aid

Gift Aid donations are treated the same way. The charity reclaims basic rate tax on your donation, so the gross value is the amount you gave divided by 0.8. An £800 donation is a £1,000 deduction from adjusted net income.

What remains after those two deductions is your adjusted net income. That is the number every threshold is tested against.

Work out your adjusted net income

Figures update as you type. There is nothing to submit.

Your figures never leave your browser. Payslips are read on your device — not uploaded, not sent to an AI. The calculation runs here too. Nothing you type is stored, logged, or passed to analytics.

Where do you pay income tax?

Scottish income tax rates and bands differ and are not covered by this tool.

England, Wales or Northern IrelandScotland

How do you want to enter your pay?

Drop a payslip to fill year-to-date figures, or enter amounts yourself below. The rest of the calculator appears once you confirm.

Use figures from a payslip

Drop a file below, check the figures, then apply. Or type year-to-date totals by hand.

Drop a payslip or P60 here

or click to choose a file

PDF preferred; a clear photo works too. Read on your device only — never uploaded. One month’s slip is enough to project the year and check the £100,000 line.

Figures are extracted in your browser (text layer or on-device OCR). The file is never sent to us, never passed to an AI provider, and is gone when you close this tab.

Choose how to enter your pay above to see your figures.

Enter figures yourself, or drop a payslip. The rest of the form appears once you confirm.

The three pension types are not interchangeable

All three reduce adjusted net income, but they do it by different mechanisms and they differ in what else they affect. This is the detail most worth understanding.

Salary sacrifice

You give up contractual pay in exchange for an employer contribution. The sacrificed amount is never your income, so it reduces income tax and employee National Insurance, and it reduces adjusted net income. It is the only one of the three that touches National Insurance.

Net pay arrangement

Your employer deducts the contribution from gross pay before working out tax. It reduces the income charged to tax and reduces adjusted net income, but it does not reduce National Insurance, which is calculated on pay before the pension deduction.

Relief at source

You pay from taxed income and the scheme reclaims basic rate tax. It does not reduce National Insurance, and, importantly, it does not reduce the income charged to tax either. Instead it widens your tax bands by the gross amount, which is how a higher rate taxpayer gets the remaining relief. It does still reduce adjusted net income by the gross figure.

That last point is subtle enough that it is worth restating: for relief at source, adjusted net income and taxable income move differently. The calculator handles both separately, and the working shows the band extension explicitly when it applies.

Common mistakes

Using the P60 figure alone. It covers employment income under that PAYE reference. It will not include rental profit, savings interest, dividends, or income from another employment.
Using the net pension contribution. Relief at source and Gift Aid are both deducted gross.
Netting off RSU sell-to-cover. The gross vest value is the income. Selling shares to fund the tax does not reduce it.
Assigning a vest to the wrong tax year. The year runs 6 April 2026 to 5 April 2027, and an early April vest can fall either side.
Forgetting the per-parent childcare test. Household income is not the measure; each parent is assessed separately.

Once you have the figure

Compare it to £100,000, where the personal allowance begins to be withdrawn, and to £100,000, where childcare support ends. The 60% band explains the first, and childcare eligibility the second.

The definition and worked examples are published by HMRC at gov.uk/guidance/adjusted-net-income. Where a figure matters, check it there and with an accountant. Everything on this page is information about how the rules work, not advice about your circumstances.