Adjusted Net Income

Your ability to claim Tax-Free Childcare, Child Benefit and 30 hours free childcare depends on you and your partner's adjusted net income. Despite the name, it's closer to your gross income than you might expect — income tax, National Insurance and student loan repayments don't reduce it, but pension contributions, some employment expenses and Gift Aid donations do.

If either you or your partner has an adjusted net income above £60,000 and you're currently claiming Child Benefit, you'll likely owe the High Income Child Benefit Charge via self assessment. Our Child Benefit charge calculator can show you how additional pension contributions could reduce your bill.

If either of you has an adjusted net income above £100,000, you won't be eligible for Tax-Free Childcare or 30 hours funded childcare (though children aged three and over will still receive 15 funded hours regardless). This can mean losing thousands of pounds in childcare support each year, so getting an accurate picture of your adjusted net income really matters. If you want to protect your entitlement, our premium calculators and consultations can help you plan around it.