Pension Tax Relief Calculator
Relief at source: enter your net payment. Salary sacrifice/net pay: enter the gross contribution. England, Wales and Northern Ireland; standard allowance, no other income.
Results
Results use 2026/27 rates and salary before contributions. Annual allowance charges, employer contributions and carry-forward are excluded. Salary sacrifice must not reduce pay below your applicable minimum wage. Higher rate relief must be claimed via Self Assessment for relief at source pensions.
What is the UK Pension Annual Allowance for 2026/27?
The UK government allows individuals to contribute up to £60,000 gross per tax year into registered pension schemes with full tax relief. Where threshold income exceeds £200,000 and adjusted income exceeds £260,000, the allowance tapers down to a minimum of £10,000.
| Income Tax Band | Marginal Tax Rate | Total Pension Relief | How Relief is Claimed |
|---|---|---|---|
| Basic Rate | 20% | 20% total | Added automatically by pension provider |
| Higher Rate | 40% | 40% total | 20% auto top-up + 20% claimed via Self Assessment |
| Additional Rate | 45% | 45% total | 20% auto top-up + 25% claimed via Self Assessment |
What is the Difference Between Relief at Source, Salary Sacrifice, and Net Pay?
Pension contribution tax efficiency depends heavily on the administrative structure used by your employer or personal provider:
- Relief at Source: Contributions come from net pay; provider claims 20% basic tax relief from HMRC. Higher/additional rate relief must be manually claimed via Self Assessment.
- Salary Sacrifice: Contractual salary is reduced before income tax and National Insurance calculations, saving both Income Tax (20%/40%/45%) and employee NI (8% or 2%).
- Net Pay: Contributions are deducted from gross pay before income tax is calculated, giving automatic tax relief at your marginal rate, but no extra NI savings.
Step-by-Step Pension Tax Relief Calculations (Worked Examples)
The mathematical breakdowns below show exact calculations for higher-rate relief, salary sacrifice savings, and basic rate top-ups.
Higher-Rate Earner (£10k Relief at Source)
Demonstrates the 40% combined relief mechanism.
Salary Sacrifice (£10,000 Sacrificed on £65k)
Demonstrates Income Tax + National Insurance savings.
Basic Rate Earner (£1,000 Gross Contribution)
Standard 20% relief at source formula.
Frequently Asked Questions
The statutory UK pension annual allowance is £60,000 across all contributions. Where threshold income exceeds £200,000 and adjusted income exceeds £260,000, the allowance tapers down to a minimum of £10,000.
Under relief at source, pension schemes automatically add 20% basic tax relief. Higher rate (40%) and additional rate (45%) taxpayers must claim the additional 20% or 25% relief via HMRC Self Assessment.
Relief at source deducts contributions after tax and reclaims 20% basic relief from HMRC. Salary sacrifice reduces gross salary before tax and National Insurance, saving both income tax and NI.
Yes. You can carry forward unused annual allowances from the previous three tax years, provided you were a member of a registered UK pension scheme during those years.