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Pension Tax Relief Calculator

See what a pension contribution really costs you after tax relief, and whether the annual allowance taper applies.

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£
£

The total that lands in your pension from you, including basic-rate relief.

You pay 80%, the provider adds 20%. Higher-rate relief is claimed through Self Assessment.

£

For the annual allowance check.

£3,000.00

Real cost of putting £5,000 into your pension · 40% tax relief

Into your pension from you£5,000.00
You pay in£4,000.00
Provider claims from HMRC (20%)£1,000.00
Extra relief to claim on your tax return£1,000.00
Take-home pay without it£45,357.40
Take-home pay with it£42,357.40
Real cost to you£3,000.00
Tax (and NI) relief£2,000.00

Don't leave £1,000 unclaimed

With relief at source, only the basic 20% is added automatically. The rest comes back only if you claim it — on a Self Assessment return, or by contacting HMRC if you don't file one. Until you do, your contribution costs you £4,000 rather than £3,000.

The same contribution, paid other ways

Net pay (workplace, from gross pay)costs £3,000same
Salary sacrificecosts £2,900£100 cheaper

Annual allowance: £60,000

You and your employer can put up to £60,000 a year into pensions with tax relief — or 100% of your earnings if lower.

Source: HMRC — pension annual allowance; income tax and NI from the 2026/27 rates. Not financial advice.

How to use

Enter your salary and the amount you want in your pension for the year — the gross figure, including any basic-rate relief your provider adds. Choose how it's paid (your payslip or scheme booklet will say) and where you live. The result is what the contribution actually costs your take-home pay, with the other two routes compared underneath.

Three ways relief is given

  • Net pay: your employer takes the contribution before calculating income tax. Full relief, automatically, but no NI saving.
  • Relief at source: you pay 80% out of taxed income and the provider claims 20% from HMRC. Higher and additional-rate taxpayers must claim the rest themselves.
  • Salary sacrifice: you give up salary and your employer pays it in. You save income tax and National Insurance.

What £1,000 in your pension really costs

  • Basic-rate taxpayer, net pay: £800 (20% relief).
  • Basic-rate taxpayer, salary sacrifice: £720 (28%, because 8% NI is saved too).
  • Higher-rate taxpayer, relief at source: £600 — you pay £800, the provider adds £200, and you claim £200 back from HMRC.
  • Earning £110,000, net pay: £400 (60% relief).

The 60% band and the £100,000 cliff

Your Personal Allowance shrinks by £1 for every £2 of adjusted net income over £100,000, and disappears at £125,140. Pension contributions reduce adjusted net income, so in that range each pension pound saves 40% tax and wins back allowance worth another 20% — 60% relief, or 62% with salary sacrifice. Bringing income down to £100,000 also keeps eligibility for tax-free childcare and the 30 funded childcare hours.

Annual allowance

You can put up to £60,000 a year into pensions with tax relief, including employer contributions, and up to 100% of your earnings from your own pocket. High earners have a tapered allowance, down to £10,000. The calculator checks your total against the allowance that applies to you.

To see a contribution's effect on your whole payslip — including student loan repayments — use the salary calculator, which has a pension field. To see what the money might grow to, try the compound interest calculator.

Frequently asked questions

How much tax relief do I get on pension contributions?

At your highest rate of income tax. Putting £1,000 into a pension costs a basic-rate taxpayer £800, a higher-rate taxpayer £600 once they've claimed the extra relief, and someone earning between £100,000 and £125,140 just £400 — because the contribution also restores their Personal Allowance.

How do I claim higher-rate pension tax relief?

If your pension uses relief at source (most personal pensions and SIPPs, and some workplace schemes), the provider only adds the basic 20%. Claim the rest on your Self Assessment return, or by contacting HMRC if you don't file one — they'll adjust your tax code. Net pay and salary sacrifice give you full relief automatically.

What is the pension annual allowance for 2026/27?

£60,000 across all your pensions, including your employer's contributions — or 100% of your earnings if that's lower (for your own contributions). Unused allowance from the previous three tax years can be carried forward if you were a member of a pension scheme in those years.

What is the tapered annual allowance?

If your threshold income is over £200,000 and your adjusted income is over £260,000, your allowance falls by £1 for every £2 of adjusted income above £260,000, down to a minimum of £10,000.

Is salary sacrifice better?

Usually, when it's offered. Because your salary actually falls, you save National Insurance too: £1,000 costs a basic-rate taxpayer £720 by salary sacrifice versus £800 through net pay. Some employers also pass on their own NI saving. It can affect earnings-linked benefits and borrowing, so check before sacrificing a large share of pay.

How does relief work in Scotland?

At your Scottish rate. An intermediate-rate taxpayer (21%) pays £790 for £1,000 through net pay. With relief at source the provider still adds 20%, and the extra 1% (or 22% at the higher rate) is claimed from HMRC — Scottish taxpayers often get this through their tax code automatically.

What if I pay in more than the annual allowance?

The excess is added to your income and taxed at your marginal rate as an annual allowance charge, unless you have unused allowance to carry forward. Large charges can be paid by your scheme from your pension ('scheme pays').

Is anything I enter sent anywhere?

No. The calculation runs in your browser.

Not financial advice

This tool provides estimates for general information only and is not financial, tax, or legal advice. Figures may not reflect the latest rules — verify with HMRC, Scottish Government, MHCLG, Revenue Scotland and Welsh Revenue Authority before making decisions.
  • Everything you type or open here is processed by your own browser. It is not sent to us and we could not read it if we wanted to.
  • Formatted for United Kingdom (en-GB), in GBP.

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