Glossary · UK
What is Adjusted Income (Pension Taper)?
Total taxable income plus all employer and personal pension contributions — used to size the taper.
Full Definition
Adjusted Income is used to calculate how much your £60,000 Annual Allowance is reduced under the Tapered Annual Allowance rules. It is total taxable income from all sources PLUS the value of employer pension contributions and any personal contributions paid under net-pay or salary-sacrifice arrangements. For every £2 of Adjusted Income above £260,000, the Annual Allowance reduces by £1, to a floor of £10,000 once Adjusted Income reaches £360,000. The taper only bites if Threshold Income also exceeds £200,000.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.