How Much Pension Tax Relief Will I Get? UK Calculator
See exactly how much tax relief you get on your pension contributions. Compare relief at source, salary sacrifice and net pay arrangements to find the most tax-efficient method for your situation. Includes NI savings, higher rate relief and effective cost per pound saved.
Pension tax relief depends on the contribution method and how much income falls in each tax band. This calculator compares the salary-based tax saving and, for salary sacrifice, employee NI saving. The standard annual allowance is £60,000; individual limits and charges are not modelled.
Your Details
Not sure? Your payslip or pension provider will say. Personal pensions and SIPPs are always relief at source.
For relief at source, enter what leaves your bank: £80 becomes £100 in the pension.
Each £1 in your pension costs you
80p
Relief at source · based on your salary and tax bands
Same pension, three ways
How Pension Tax Relief Works
Pension tax relief is one of the most valuable tax benefits in the UK. When you save into a pension, the government effectively refunds the income tax you paid on that money. For basic rate taxpayers using relief at source, every £80 you contribute becomes £100 in your pension — the provider claims the extra £20 from HMRC automatically.
Higher and additional rate taxpayers can claim extra relief through Self Assessment. A 40% taxpayer contributing £100 gross gets £40 of total relief — £20 added by the provider and £20 reclaimed via their tax return. Salary sacrifice is even more efficient because it also saves National Insurance (8% on earnings up to £50,270, 2% above), which relief at source does not.
The annual allowance for 2026/27 is £60,000, including employer contributions. For high earners with adjusted income above £260,000, this tapers down to a minimum of £10,000. Unused allowance from the previous three tax years can be carried forward.
What You Need to Know About Pension Relief
There are three main methods of pension tax relief in the UK. Relief at source is the most common for personal and workplace pensions — contributions come from net pay and the provider adds 20%. Net pay arrangements deduct contributions from gross pay before tax, giving full relief automatically. Salary sacrifice reduces your contractual salary, saving both Income Tax and NI.
The Lifetime Allowance was abolished from April 2024. However, the maximum tax-free lump sum is now capped at £268,275 (25% of the old £1,073,100 LTA) unless you have transitional protections. This means there is no longer a penalty for building a large pension pot, but the tax-free cash you can take is still limited.
Frequently Asked Questions
How does pension tax relief work in the UK?
When you contribute to a pension, the government adds money through tax relief. For every £80 you pay in net, the provider adds £20 as basic rate relief, making a gross contribution of £100. Higher and additional rate taxpayers claim extra relief through Self Assessment.
What is the difference between relief at source and salary sacrifice?
With relief at source, contributions come from net pay and the provider reclaims 20% from HMRC. With salary sacrifice, your contractual salary is reduced before tax and NI are calculated, saving both Income Tax and National Insurance on the sacrificed amount.
What is the pension annual allowance for 2026/27?
The standard annual allowance is £60,000, including employer contributions. Your allowance may be lower, and eligible unused allowance may be carried forward. Exceeding the available allowance can cause a tax charge; this calculator does not calculate that charge. Check HMRC guidance for your circumstances.
Can I carry forward unused pension allowance?
Yes. You can carry forward unused annual allowance from the previous three tax years, provided you were a member of a registered pension scheme. You must use the current year's allowance first before dipping into previous years.
How much NI do I save with salary sacrifice?
With salary sacrifice you save NI at your marginal rate. For 2026/27, employees pay 8% on earnings between £12,570 and £50,270, and 2% above that. So compared with relief at source, salary sacrifice saves an extra 8p per £1 for basic-rate earners and 2p for higher-rate earners.
Do I need to claim higher rate pension tax relief?
If you use relief at source, basic rate relief is added automatically. Higher and additional rate taxpayers must claim the extra 20% or 25% through Self Assessment. With salary sacrifice or net pay, full relief is given automatically through payroll.
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2026/27 estimate for England, Wales and Northern Ireland or Scotland. Relief is calculated from the salary entered, including band crossings and allowance tapering. Annual-allowance charges, carry-forward and other income are not modelled. Net pay savers earning under £12,570 can get a separate HMRC top-up after the tax year, which is not included. Relief-at-source contributions are capped at the higher of £3,600 gross and earnings; other methods are capped at salary.
Enter contributions consistently when comparing methods
For relief at source, enter the amount you pay from net income each month: £80 becomes £100 gross in the pension after the basic-rate top-up. For net pay or salary sacrifice, enter the gross monthly contribution. Entering the same number for every method therefore does not compare identical pension pot contributions.
The calculation uses salary-based tax bands for the region you choose. The comparison above puts the same gross amount into the pension under each method, so you can compare like for like. Annual-allowance charges and carry-forward are not modelled: the standard £60,000 annual allowance is not a universal contribution limit. Check HMRC annual allowance guidance for your circumstances.
Use the income tax calculator to inspect tax bands, or compare two salaries to model job offers with salary-sacrifice pension percentages.