Adjusted Net Income - Private Pension

Hi there, I am struggling to make sense of what my net adjusted income will be. I have two jobs: 1. £85,000 where I salary sacrifice 4% of my salary to a pension. My payslips state my 'Taxable pay' will be around £82,000. 2. £20,000 where I pay 1.7% towards a pension. Total earnings are £105,000 per annum. I also pay into a private pension that uplifts every £1 I pay in to £1.25. So if I pay in £1000, my balance shows as £1,250. Due to the benefits associated with childcare, I want to keep my adjusted net income below £100,000. My questions are: 1. Does my salary sacrifice of 4% reduce my adjusted net income by £3,400 (4% of £85,000) 2. Does my payment into my private pension reduced my adjusted net income by £1 for every £1 I pay in, or £1.25, or £1.40 as I pay 40% income tax, or some other figure? All help is very greatly appreciated.

Hi,
Help with adjusted net income online, please see the following information:
Personal Allowances: adjusted net income
Thank you.

Hi admin, Thanks for getting back to me. The main issue I have here is that page you have linked me to doesn’t answer my second question. Could you please clarify? Thanks again.

Hi Harrim,
The link would be Personal Allowances: adjusted net income
Thank you.

Hi, I have a taxable gross annual income of £125,000. However, I also receive £15,000 per year in pension contributions from my employer, which means my adjusted income is £140,000. In order to qualify for tax free childcare and free childcare for working parents, I have reduced my adjusted net income to under £100,000 by making additional voluntary pension contributions of £45,000 (salary sacrifice so before tax). That brings my adjusted net income to £95,0000, and the pension contributions (£60k) remain within the permitted annual allowance. However, I also expect an annual bonus each year (amount will vary but for this example, let's assume it will be £20,000). This will take my adjusted net income back above £100,000. If I pay my entire bonus into my pension, I know that any contribution above the AA will be subject to the annual allowance charge at my marginal tax rate. However, my question is for the purposes of my tax free children/free childcare for working parents, does that £20k pension overpayment still help to reduce my adjusted net income and enable me to qualify for these childcare support?

[Display name amended - Admin]

Hi,

Pension contributions from your net wage will reduce your adjusted net income. You can see guidance here:

Personal Allowances: adjusted net income

Thank you.