Pension Tax Relief Calculator 2026/27
See how much tax relief you get on a pension contribution, what your provider adds, what you can claim back through Self Assessment, and what the contribution really costs you.
Last updated: October 2026 · 2026/27 rates
Your contribution
Annual figure for 2026/27.
True cost of £10,000 going into your pension
£6,054.00
Total relief £3,946.00, an effective rate of 39.5%.
Where the relief comes from
| Tax band | Income relieved | Relief |
|---|---|---|
| Basic Rate (20%) | £270.00 | £54.00 |
| Higher Rate (40%) | £9,730.00 | £3,892.00 |
Your provider claims 20% on the whole gross amount. Anything above that, £1,946.00 here, is yours to claim from HMRC.
Same £10,000 gross, each method
| Method | Tax relief | NI saved | Net cost |
|---|---|---|---|
| Relief at source | £3,946.00 | £0.00 | £6,054.00 |
| Net pay arrangement | £3,946.00 | £0.00 | £6,054.00 |
| Salary sacrifice | £3,946.00 | £216.20 | £5,837.80 |
How pension tax relief works
Pension contributions are paid from income that has not been taxed, so the government gives back the income tax you would otherwise pay on the money that goes in. How you receive it depends on how your scheme collects contributions.
Relief at source. You pay from your take-home pay and the provider claims basic-rate relief of 20% from HMRC and adds it: pay £80 and £100 goes in. The 20% is added whatever your tax rate, even if you pay no tax, up to the limits below. Higher and additional rate taxpayers get more, but only if they claim it.
Net pay arrangement. Your employer takes the contribution from your pay before income tax is worked out, so you get relief at your top rate straight away with nothing to claim. National Insurance is still charged on your full salary.
Salary sacrifice. You give up part of your salary and your employer pays it into your pension. Because your salary is lower, you save income tax and employee NI (8% up to £50,270, 2% above). Your pay after the sacrifice must not fall below the National Living Wage of £12.71 an hour. Model the take-home effect with the salary sacrifice calculator.
This calculator works out your income tax with and without the contribution using the same 2026/27 engine as our income tax calculator, so band crossovers and the Personal Allowance taper are handled exactly rather than with a flat percentage.
You earn £60,000 and pay £8,000 into a relief at source pension. The provider grosses it up: £8,000 ÷ 0.8 = £10,000, adding £2,000.
Claiming higher rate relief extends your basic rate band by the gross £10,000. Higher rate tax starts at £50,270, so only £9,730 of your income was taxed at 40%. That £9,730 now falls in the basic rate band, saving another 20%: £1,946 to claim. The remaining £270 was taxed at 20% anyway, so it earns nothing extra.
True cost: £8,000 minus £1,946 = £6,054 for £10,000 in your pension, an effective 39.5%. This is why a contribution that straddles the 40% threshold does not get 40% on all of it.
The same £10,000 gross through salary sacrifice costs £5,838, because NI is saved too; through net pay it costs £6,054, the same as relief at source once the extra relief has been claimed.
Pension calculators
This calculator is part of a family. The main calculator covers the general case.
Main calculator: Pension Calculator
Project workplace auto-enrolment and SIPP contributions to estimate retirement income.
Related calculators
Other free UK tools that follow on from this calculation.
Pension Calculator
Project workplace auto-enrolment and SIPP contributions to estimate retirement income.
Salary Sacrifice Calculator
How much pension you actually buy for every pound of take-home pay you give up.
Pension Carry Forward Calculator
Unused annual allowance from the last three years, and how much you can pay in this year.
Income Tax Calculator
PAYE tax, National Insurance and take-home pay for any UK salary, including Scotland.
Reviewed by Alexandre Bernier, LLM (UK), CFP®
Educational tool: estimates only. Not individual financial, investment, tax or legal advice. Using it does not create an adviser-client relationship. Rules and figures change; check them against current HMRC and GOV.UK guidance and speak to a qualified professional. Editorial policy →
Sources
Every rate and threshold used by this calculator is taken from the official pages below. If a figure here disagrees with one of these, the official page is right, please tell us.