Calculating adjusted net income for Tax-free Childcare

Hi, I am looking into applying for Tax-free Childcare for my son. As part of this i am working out my adjusted net income and considering making additional pension contributions. https://www.gov.uk/guidance/adjusted-net-income states that adjusted net income is calculated as net income, minus Gift Aid contributions, minus employee pension contributions, plus any tax relief for payments to trade unions or police organisations. My question is around employer pension contributions. I have seen that some website suggest that these should be added as part of adjusted net income calculation. For example, net income, minus Gift Aid contributions, minus employee pension contributions, plus any tax relief for payments to trade unions or police organisations, plus employer pension contributions. Please can anyone confirm? Regards, James

Hi,

They are added in as part of the calculation to determine  if you have a reduced annual allowance. The link you sent is how you should work out the calculation. You can see information regarding annual allowance here:

Work out your reduced (tapered) annual allowance

Thank you.

Thank you for confirming, that is great. My employee pension contributions are taken before tax under salary sacrifice. When calculating my adjusted net income should these be deduced a 1x or 1.25x? Regards, James

Hi,

These would be deducted at 1x from your salary if you haven't already taken them off.

Thank you.

Thanks. That is what i thought. I have all the info i need now. Regards, James