Pension Tax Relief Calculator UK
See how much tax relief you get on pension contributions and what they really cost you.
Your pension contribution of £6,000/year costs you
£3,600
You save £2,400 in tax relief (40% discount)
Goes into pension
£6,000
Tax relief (auto)
£1,200
20% basic rate
Extra relief (claim)
£1,200
20% via self-assessment
If via Salary Sacrifice Instead
Salary sacrifice saves additional NI on top of tax relief:
Relief at Source
Costs £3,600
Salary Sacrifice
Costs £3,480
Save extra £120 NI
How Pension Tax Relief Works
When you contribute to a pension, the government adds tax relief. Basic rate (20%) is added automatically by your pension provider. If you pay higher (40%) or additional (45%) rate tax, you claim the extra relief through self-assessment — HMRC either refunds you or adjusts your tax code.
With salary sacrifice, your employer reduces your salary before tax and NI, then contributes the full amount to your pension. This saves you both tax AND National Insurance, making it the most tax-efficient method.
About the Pension Tax Relief Calculator
Pension tax relief is one of the most powerful tax incentives available in the UK. When you contribute to a pension, the government effectively refunds the Income Tax you paid on that money. Basic-rate taxpayers get 20% relief automatically added to their pension pot by the provider. Higher and additional rate taxpayers can claim a further 20% or 25% back through their Self Assessment tax return or by adjusting their tax code.
The Annual Allowance — the maximum you can contribute with tax relief in a single tax year — is £60,000 for 2024/25, or 100% of your earnings if lower. If your threshold income exceeds £200,000 and adjusted income exceeds £260,000, the Tapered Annual Allowance reduces this by £1 for every £2 over, down to a minimum of £10,000. You can also carry forward unused allowance from the previous three tax years, potentially allowing contributions well over £60,000 in a single year.
How to Use This Calculator
- Enter your gross annual income
- Select your pension contribution amount (gross or net)
- Indicate whether contributions are personal or via salary sacrifice
- Add any unused Annual Allowance from previous years if carrying forward
- View the total tax relief received, effective cost of the contribution, and any Annual Allowance remaining
Key Facts
Salary sacrifice pension contributions save National Insurance as well as Income Tax, making them even more valuable than personal contributions. For those earning between £100,000 and £125,140, pension contributions can restore the Personal Allowance — a £1,000 pension contribution in this band saves £600 in tax (effectively 60% relief). The Lifetime Allowance was abolished in April 2024, meaning there is no longer a cap on total pension savings, only on annual contributions.