🪙Pension Tax Relief Calculator

About this tool

Enter the total going into your pension each year (gross), your salary and how you contribute. You'll see the real cost to you, the tax relief, how much you pay in and how much more to claim on Self Assessment for relief at source, plus the National Insurance saved with salary sacrifice. There's an option for Scottish taxpayers and for employers that share their NI saving.

How UK pension tax relief works

Money paid into a pension gets tax relief at your highest rate of income tax, which is what makes pensions such efficient savings. How you receive it depends on the scheme. With relief at source, used by most personal pensions and SIPPs and some workplace schemes, you pay 80% and the provider claims the basic-rate 20% from HMRC. Higher and additional-rate taxpayers then reclaim the extra 20% or 25% through Self Assessment or a tax-code change. Many people miss this. With net pay, contributions are taken from your salary before tax, so full relief is automatic. With salary sacrifice, you give up salary in return for an employer contribution, which also saves employee National Insurance (8%, or 2% above £50,270). Some employers pass on part of their own 15% NI saving. For example, on a £60,000 salary, £6,000 a year into a pension costs a 40% taxpayer just £3,600. Earners between £100,000 and £125,140 effectively get 60% relief, because contributions bring back the personal allowance that's being withdrawn. Honest limits: tax relief is limited to 100% of your earnings and the £60,000 annual allowance, which tapers for very high incomes, though unused allowance can usually be carried forward three years. The government has announced that NI savings on salary sacrifice above £2,000 a year will be capped from April 2029, and this isn't financial advice. The UK income tax calculator, the retirement calculator and the State Pension age calculator are related.

Frequently asked questions