UK Pension Contribution & Tax Relief Calculator
What each £1 into your pension really costs, and whether you stay within the allowance.
Tax Year 2026-27 Relief at source, net pay and salary sacrifice · annual allowance · Rules used
The same contribution, three ways (a month)
| From your side | Relief at source | Net pay | Salary sacrifice |
|---|
You cannot choose freely: your scheme decides between relief at source and net pay, and salary sacrifice needs your employer to offer it.
Annual allowance check · Tax Year 2026-27
| Item | A year |
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State Pension estimate
The full new State Pension is £241.30 a week. With a record that started after April 2016 you need 35 qualifying years for the full amount and 10 for any; each year adds one 35th. Older records (contracted out, Additional State Pension) work differently: check your forecast.
Rules used · Tax Year 2026-27
- Tax relief on personal contributions up to 100% of your UK earnings a year; with no earnings, relief at source on up to £3,600 gross (£2,880 paid in).
- Relief at source: the provider adds 20%. Higher and additional rate taxpayers claim 20% or 25% more through Self Assessment; in Scotland 1%, 22%, 25% or 28% more at the 21%, 42%, 45% and 48% rates.
- Net pay: contributions come off pay before Income Tax, but not before National Insurance.
- Salary sacrifice: Income Tax, employee National Insurance (8% up to £50,270, 2% above) and employer National Insurance (15%) are saved on the pay given up.
- Annual allowance £60,000, tapered by £1 for every £2 of adjusted income above £260,000 when threshold income is above £200,000, to no less than £10,000. Unused allowance carries forward from the previous 3 tax years, earliest first.
- Money purchase annual allowance £10,000 after flexibly accessing a pension; it cannot be topped up with carry forward.
Official sources
- GOV.UK: tax relief on pension contributions
- GOV.UK: pension annual allowance
- GOV.UK: work out your tapered annual allowance
- GOV.UK: unused annual allowance (carry forward)
- GOV.UK: money purchase annual allowance
- HMRC: pension schemes rates and allowances
- GOV.UK: salary sacrifice for employers
- GOV.UK: salary sacrifice reform for pension contributions
- GOV.UK: rates and thresholds for employers
- GOV.UK: the new State Pension, what you’ll get
Tax rules and rates change. This calculator follows the rules described on this page and may not cover every situation. Check the official source or a qualified tax professional before filing or invoicing.
About the UK Pension Contribution & Tax Relief Calculator
Pension contributions get tax relief, but how much — and how you get it — depends on how your scheme takes the money. With relief at source you pay from take-home pay and the provider adds 20%, and higher-rate taxpayers claim the rest back; with a net pay arrangement the contribution comes off your pay before Income Tax; with salary sacrifice you give up salary and save National Insurance too. This calculator shows what the same contribution costs you each way, at the England, Wales and Northern Ireland or the Scottish rates.
It also checks the annual allowance (£60,000, tapered for very high incomes, plus unused allowance carried forward from the previous 3 tax years), the £10,000 money purchase annual allowance after you have flexibly accessed a pension, and the Personal Allowance you win back between £100,000 and £125,140 of income — and it can estimate your new State Pension from your qualifying years.
How to use it
- Choose where you pay Income Tax and enter your salary before any pension deduction or salary sacrifice.
- Choose how your contribution is paid (your payslip or scheme tells you), then enter the amount a month or a year — for relief at source, what you pay before the provider adds relief.
- Add your employer’s contribution, and for salary sacrifice the share of its National Insurance saving your employer passes on, if any.
- Open the annual allowance section to add unused allowance from the last 3 tax years, savings in other defined contribution pensions, the growth of a defined benefit pension, or the money purchase annual allowance.
- Read the real cost, the relief and the three-way comparison, and check the annual allowance table. Copy the summary for your records.
Examples
Salary £30,000 · £100 a month paid in
£125 a month in the pension for £100: 80p for each £1
Salary £60,000 (£9,730 taxed at 40%) · £10,000 gross
Provider adds £2,000 · £1,946 more claimed back · real cost £6,054
GOV.UK’s rule: extra relief of 20% up to the amount of income taxed at 40%.
Income Tax saved £3,946 · employee NI saved £216.20
Real cost £5,837.80 · the employer also saves £1,500 of NI
£8,000 paid in (£10,000 gross) · relief at source
Personal Allowance back from £7,570 to £12,570 · real cost £4,000 (60% relief)
The three ways relief is given
- Relief at source (personal and stakeholder pensions, SIPPs, some workplace schemes): you pay 80% and the provider claims 20% from HMRC, even if you pay no tax (on up to £3,600 gross without earnings). Higher-rate taxpayers claim 20% more up to the income taxed at 40%, and 25% up to the income taxed at 45%, through Self Assessment or a tax code change. In Scotland the extra is 1%, 22%, 25% or 28% for income taxed at 21%, 42%, 45% or 48%; starter-rate taxpayers keep the full 20%.
- Net pay arrangement: your employer takes the contribution before Income Tax, so relief is automatic at your top rate. National Insurance is still charged on it.
- Salary sacrifice: you give up salary and your employer pays it in. You save Income Tax and employee National Insurance (8%, or 2% above £50,270); your employer saves 15% and may pass some on.
Annual allowance
You can save up to £60,000 a year into pensions (you, your employer and tax relief together, and the growth of a defined benefit pension) before a tax charge. It is tapered — £1 less for every £2 of adjusted income above £260,000, to a minimum of £10,000 — only if threshold income is also above £200,000. Unused allowance from the previous 3 tax years can be carried forward, earliest year first, if you were a member of a registered scheme in those years. After flexibly accessing a pension, the money purchase annual allowance of £10,000 limits defined contribution savings and cannot be topped up with carry forward; if you go over it, defined benefit growth is checked against an alternative annual allowance of £50,000 (less with a tapered allowance), and the charge is on the higher result of that test and the normal one (GOV.UK: money purchase annual allowance). Savings over the allowance are added on top of your taxable income and taxed at your rates; they do not reduce your Personal Allowance. GOV.UK: annual allowance.
The 60% band between £100,000 and £125,140
The Personal Allowance falls by £1 for every £2 of adjusted net income over £100,000. Pension contributions reduce adjusted net income, so each pound paid in within this band also wins back 50p of Personal Allowance: with 40% tax that adds up to 60% relief. Relief at source gives the 20% in the pension; the rest comes back through Self Assessment.
Salary sacrifice in future
The government has announced that from the 2029-30 tax year, salary sacrificed into a pension above £2,000 a year will pay employee and employer National Insurance; Income Tax relief does not change. GOV.UK: salary sacrifice reform.
Limitations
- Savings interest and dividends, the High Income Child Benefit Charge, Marriage Allowance and student loan repayments are not included.
- National Insurance is worked out for the year as a whole (category A); payroll works it out per pay period.
- Defined benefit growth (the pension input amount) comes from your scheme’s pension savings statement and has its own field; the contribution you enter here and your employer’s are treated as defined contribution savings. For the taper test, adjusted income counts that growth in full, although strictly only the part your employer paid for counts, so the test may come out slightly high.
- The annual allowance charge is an estimate at your tax rates; tapered allowances and carry forward for earlier years need those years’ figures.
- The State Pension estimate is for records that started after April 2016; older records can be higher or lower, so use your official forecast.
Privacy
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Frequently asked questions
How much tax relief do I get on pension contributions?
Relief at your top rate of Income Tax: 20% for basic-rate taxpayers, 40% higher rate and 45% additional rate (Scotland: 19% to 48%). With relief at source the provider adds 20% and you claim the rest; with net pay or salary sacrifice it is automatic.
How do I claim higher-rate relief on a SIPP or personal pension?
On your Self Assessment tax return, or by contacting HMRC if you do not file one. Enter the gross amount (what you paid plus the 20% the provider added). The refund comes to you, not into the pension.
Is salary sacrifice better than a normal contribution?
For the same amount going into the pension it usually costs you less, because you also save National Insurance, and some employers add their own NI saving. It lowers your cash salary, which can reduce statutory pay and some benefits, and it must not take pay below the minimum wage.
What happens if I go over the annual allowance?
The excess is taxed at your Income Tax rates as if it were added on top of your taxable income (it does not reduce your Personal Allowance), through Self Assessment. You may be able to cover it with unused allowance from the previous 3 tax years, and if the charge is large your scheme may pay it from your pension (“scheme pays”).
I do not pay Income Tax. Do I still get relief?
Yes, with relief at source: the provider adds 20% on what you pay in up to 80% of your earnings (100% gross), or up to £2,880 a year (£3,600 gross) if you have no earnings. Under a net pay arrangement there is no Income Tax to save.
How much is the State Pension?
The full new State Pension is £241.30 a week. You usually need 35 qualifying National Insurance years for the full amount (if your record started after April 2016) and 10 to get any. Check your forecast on GOV.UK.