Pension Tax Relief Calculator

Relief at your marginal rate. A basic-rate taxpayer pays £80 for every £100 that lands in the pension; a higher-rate taxpayer pays £60 once the extra relief is claimed through self-assessment or a tax code change, and an additional-rate taxpayer £55. Under relief at source the provider adds the basic 20% automatically and you claim the rest; under net pay the full relief comes through payroll; under salary sacrifice the contribution never counts as pay, so you also save National Insurance. Scottish rates change the numbers at each band. This calculator shows the cost of the same contribution under all three routes. A general pension calculator projects the pot; this pension calculator for the UK looks at the cost side, what each contribution takes from pay. A salary sacrifice pension calculator shows the extra National Insurance saving that route adds, and a higher rate pension tax relief calculator shows the 20% you have to claim back yourself rather than receive through payroll.

Money paid into a pension is not income-taxed, so each £1 costs you £1 less the tax you would have paid on it: 80p for a basic-rate taxpayer, 60p at the higher rate, 55p at the additional rate — and less than that in Scotland’s higher bands or in the £100,000–£125,140 zone where the personal allowance is being withdrawn. How you receive that relief depends on the mechanism your scheme uses, which is the question this calculator answers.

Under net pay the contribution is deducted before tax is worked out, so the full relief arrives in your payslip automatically. Under relief at source you pay 80% of the gross amount from taxed pay and the provider claims the other 20% from HMRC — which is right for a basic-rate taxpayer and short for anyone paying more. A higher-rate taxpayer putting £6,000 in gets £1,200 at source and must claim another £1,200 through self-assessment or a tax-code change; check your scheme and HMRC guidance before claiming.

Salary sacrifice can save NI, but eligibility and effects on benefits matter. You give up salary and the employer pays the same amount into the pension, so the pay was never earned for NI purposes: you save 8% NI below £50,270 (2% above) on top of the income-tax relief, and the employer saves 15%. On £40,000 and a 5% contribution that turns an 80p cost per £1 into 72p — and about 63p per £1 reaching the pot if the employer passes its whole £300 saving on. The catches: a lower headline salary can affect mortgage applications, statutory pay and pension based on salary, and it cannot take you below the minimum wage.

For England, Wales and Northern Ireland, in that band each £2 of income removes £1 of personal allowance, so £1 of income carries 40p of tax plus 20p from the allowance lost — a 60% effective marginal rate. A pension contribution that brings adjusted net income back under £100,000 restores the allowance and saves at that rate. £10,000 in from £110,000 saves £6,000 of tax.

The standard annual allowance is £60,000 including employer additions; personal contribution relief also has an earnings limit. These are separate tests. Above that the excess is taxed at your marginal rate, unless you have unused allowance from the previous three tax years to carry forward. Tapering also has a threshold-income test and a £10,000 floor; this tool does not assess it. Non-earners can pay in £2,880 net (£3,600 gross).

A tax relief calculator. A pension calculator in the usual sense projects the size of the pot at retirement from contributions and growth; this pension calculator UK savers can use looks at the other end, the cost of a contribution today from your take-home pay under net pay, relief at source and salary sacrifice. Use it to decide how much to put in and by which route, then use a projection tool for what it grows into.