Adjusted net income
Your taxable income after certain deductions such as pension contributions; above £100,000 you lose working-parent hours and Tax-Free Childcare
By The Toddly editorial team · Last updated 11 November 2026
Adjusted net income starts with your total taxable income (salary, self-employed profits, rental income, savings interest and so on) and takes off some items, mainly pension contributions made gross or through relief at source, and Gift Aid donations. If either parent expects it to be over £100,000 in the current tax year, the family cannot get Free Childcare for Working Parents or Tax-Free Childcare. Paying more into a pension can bring adjusted net income below the limit. HMRC’s guidance explains the calculation in detail; take advice if you are close to the line.