Calculate how much tax relief you receive on your pension contributions for the 2026-27 tax year.
This calculator provides estimates only. Tax relief depends on your individual circumstances and pension scheme type. Always consult HMRC or a financial adviser.
Pension tax relief is one of the most valuable tax benefits available to UK workers. When you contribute to a pension, the government effectively refunds some or all of the income tax you paid on that money, making your pension contributions more powerful than regular savings. For the 2026-27 tax year, pension contributions receive tax relief at your marginal rate: 20% for basic rate taxpayers, 40% for higher rate taxpayers, and 45% for additional rate taxpayers. The annual allowance -- the maximum amount that benefits from tax relief -- is GBP 60,000, or 100% of your earnings if lower. There are two main ways pension tax relief is delivered. Relief at source is used by most personal pensions and some workplace schemes. You pay contributions from your net (after-tax) pay, and the pension provider claims 20% basic rate relief from HMRC, adding it to your pot. If you pay higher or additional rate tax, you claim the extra relief through your self assessment tax return. Net pay arrangements are used by many workplace pension schemes, especially in the public sector. Your contribution is deducted from your salary before income tax is calculated, so you receive full tax relief automatically through your payroll. No further action is needed. Understanding your pension tax relief helps you make the most of your contributions and plan your retirement savings efficiently. A higher rate taxpayer contributing GBP 500 per month effectively pays only GBP 300 after tax relief -- a 40% discount on their pension savings. The annual allowance of GBP 60,000 applies across all your pension schemes combined. If you have unused allowance from the previous three tax years, you can carry it forward, potentially allowing larger contributions in a single year. This is particularly useful for those with variable income, such as bonus earners or the self-employed.
To calculate your pension tax relief: 1. Enter your annual salary. This is your gross annual salary before tax and pension deductions. Include all taxable employment income. 2. Enter your monthly pension contribution. This is the amount you contribute each month. For relief at source, enter the net amount you pay (before the provider adds basic rate relief). For net pay, enter the amount deducted from your payslip. 3. Select your contribution type. Choose "Relief at Source" if your pension provider adds 20% tax relief to your contributions. Choose "Net Pay Arrangement" if your contribution is taken before tax through your payroll. 4. Review the results. The calculator shows your gross annual contribution, the tax relief at each rate, the total relief, your effective cost, and how much of your GBP 60,000 annual allowance remains. 5. Use the pie chart to visualise the split between your actual cost and the tax relief received. Compare different contribution levels to find the optimal amount for your situation.
Pension tax relief is calculated differently depending on the scheme type. For relief at source schemes: 1. Your net monthly contribution is multiplied by 12 to get the annual net amount 2. Gross contribution = net contribution divided by 0.8 (because basic rate relief of 20% is added) 3. The gross amount is capped at the annual allowance (GBP 60,000) and 100% of earnings 4. Basic rate relief = gross contribution minus net contribution (the 20% added by the provider) 5. Higher rate relief = portion of gross contribution falling in the higher rate band (GBP 50,271 to GBP 125,140) multiplied by 20% (the difference between 40% and the 20% already claimed) 6. Additional rate relief = portion falling above GBP 125,140 multiplied by 25% (45% minus 20%) For net pay arrangements: 1. Your contribution is already gross (taken before tax) 2. Relief is calculated as the tax saved by reducing your taxable income 3. Basic rate relief = contribution in basic rate band multiplied by 20% 4. Higher rate relief = contribution in higher rate band multiplied by 40% 5. Additional rate relief = contribution in additional rate band multiplied by 45% The effective cost is the gross contribution minus total tax relief -- what you actually give up in spending power.
Inputs: Annual salary: GBP 35,000, Monthly contribution: GBP 200, Relief at source
Inputs: Annual salary: GBP 60,000, Monthly contribution: GBP 500, Relief at source
Inputs: Annual salary: GBP 100,000, Monthly contribution: GBP 5,000, Relief at source
If you are a Scottish taxpayer, your income tax rates differ (19%, 20%, 21%, 42%, 45%, 48%) but the pension tax relief principles are the same. You receive relief at your Scottish marginal rate. Higher and additional rate taxpayers using relief at source must claim their extra relief through self assessment. This is done on your tax return. If you do not normally file a tax return, you can write to HMRC to request an adjustment to your PAYE tax code instead. The tapered annual allowance affects those with adjusted income over GBP 260,000. The allowance reduces by GBP 1 for every GBP 2 of income above GBP 260,000, down to a minimum of GBP 10,000. Employer contributions count towards the annual allowance but do not receive separate tax relief (they are a tax-deductible business expense for the employer). The combined total of employee and employer contributions must stay within GBP 60,000. Carry forward allows you to use unused annual allowance from the previous three tax years. You must have been a member of a registered pension scheme in each year you wish to carry forward from. The current year's allowance is used first.