Adjusted Net Income Calculator

Adjusted net income (ANI) is a figure HMRC uses to test whether you're affected by certain tax rules, mainly the Personal Allowance taper above £100,000 and the High Income Child Benefit Charge above £60,000. It starts with your total taxable income from all sources, and then subtracts grossed-up Gift Aid donations and grossed-up relief-at-source pension contributions. It isn't the same figure as your salary, and it isn't the same figure used for the pension Annual Allowance taper either.

Add up your total taxable income (salary, bonus, self-employment profit, dividends, savings interest, rental income, and so on), then subtract 1.25 times whatever you actually paid in Gift Aid donations and relief-at-source pension contributions. The 1.25 multiplier accounts for the basic-rate tax relief already added to those payments. The calculator above does this automatically once you enter your figures.

It's the informal name for the effective tax rate created by the Personal Allowance taper between £100,000 and £125,140 of adjusted net income. In that band, you pay 40% Income Tax as normal, but you also lose 50p of Personal Allowance for every £1 earned, which becomes taxable at 40% too, pushing the effective marginal rate on that slice of income to around 60%. Sacrificing salary or making a pension contribution that brings your adjusted net income back under £100,000 avoids this rate entirely on the amount contributed.

It depends on the type. A relief-at-source contribution, paid from your take-home pay into a personal pension or SIPP, does reduce adjusted net income once grossed up, and this calculator includes it. A salary sacrifice or net pay arrangement workplace pension contribution also reduces it, but indirectly: that money is never part of your income in the first place, so it's already excluded before you even get to the adjusted net income calculation. Don't enter salary sacrifice amounts in the pension field above, since your salary figure should already be net of them.

Yes. Charities claim basic-rate tax relief on top of what you actually donate, so for adjusted net income purposes HMRC has you subtract the grossed-up amount, what you paid, divided by 0.8 (the same as multiplying by 1.25). A £1,000 donation reduces your adjusted net income by £1,250.

It's a tax charge that claws back some or all of the Child Benefit paid to a household, based on whichever partner has the higher adjusted net income. It starts at £60,000 and increases by 1% of the Child Benefit for every £200 of income above that, reaching 100% (a full clawback) at £80,000. It applies to whoever in a couple has the higher adjusted net income, not the combined household income.

Often yes, even if the charge cancels out the payment financially. Claiming Child Benefit gives the claiming parent National Insurance credits towards their State Pension if they're not working or earning enough to get credits another way, and it registers your child for a National Insurance number automatically. You can claim it and opt out of actually receiving the payments, which avoids the charge altogether while keeping the credits.

Divide the amount your adjusted net income is over £100,000 by 1.25, that's the net Gift Aid donation or relief-at-source pension contribution needed to bring it back down to the threshold. For example, if your adjusted net income is £8,000 over, an extra £6,400 net contribution would clear it. The calculator above works this out for your own figures automatically.

No, even though the names are easy to mix up. Adjusted net income (this calculator) is used for the Personal Allowance taper and the High Income Child Benefit Charge. "Adjusted income" and "threshold income" are separate, related figures used only to work out whether your pension Annual Allowance is tapered, and they're calculated differently, adding back pension contributions rather than subtracting them. See the salary sacrifice pension calculator's FAQ for more on the Annual Allowance taper specifically.