I am a US citizen living in the UK, and I employed by a UK company. My income is paid to me 'net' - i.e. 1) with income tax and national insurance already deducted, and 2) my contribution to my employer's pension plan (which is not taxed) also deducted.
When reporting my foreign income, should I report/calculate my gross income by adding income tax and national insurance deductions to my net received income (I appreciate that I can report these taxes in the 'Deductions and Credits' Foreign Taxes section)? Does my pension contribution need to be reported as part of my gross income (i.e. should I add that on too?)? Do I need to also add on my employer's contribution to my pension?
Yes. Yes. And yes. You should report your foreign gross income, before any foreign deductions. Your pension contribution also needs to be included as income as foreign pension contributions are not qualified plans and therefore not deductible. You should also add your employer's contribution if it is now accessible to you (if it is vested).
You are three steps ahead and thinking like the IRS! All worldwide income needs to be reported no matter how it is received. Make sure to convert your wages to US dollars, but I'm certain you knew that already!