Money Worked Out

Pension tax relief calculator

Enter your salary, how your workplace pension is set up and what you pay in. The calculator shows how much goes into your pension, how much your take-home pay falls, and the tax relief that makes up the difference.

Tax relief on your pension a year

£1,200.00

£3,000.00 goes into your pension and your take-home pay falls by £1,800.00
Your provider adds £600.00; claim £600.00 more from HMRC

Your details

Ask your employer or pension provider if you are not sure

%

Your pension tax relief
Amount a year
Take-home without pension£45,361.00
Take-home with pension£43,561.00
Pension added£3,000.00
Cost to you£1,800.00
Tax relief£1,200.00
Provider top-up£600.00
Claim from HMRC£600.00
How this was worked out
  1. Salary a year before tax: £60,000.00
  2. You pay 5% of your salary; £3,000.00 goes into your pension
  3. Take-home without pension: £45,361.00
  4. Take-home with pension: £43,561.00
  5. Cost to you: £45,361.00 − £43,561.00 = £1,800.00
  6. Total relief: £3,000.00 − £1,800.00 = £1,200.00
  7. Your provider adds: £600.00
  8. Extra relief to claim from HMRC: £1,200.00 − £600.00 = £600.00
  9. Each £1 in your pension costs you: £1,800.00 ÷ £3,000.00 = 60p

What the calculator assumes

How pension tax relief works

Money you pay into a workplace pension gets tax relief at your highest rate of Income Tax, so a pound in your pension costs you less than a pound of take-home pay. How you get the relief depends on how your scheme takes the money.

With relief at source, your contribution comes out of your pay after tax, and the pension provider claims basic-rate tax from the government and adds it to your pension. If you pay tax above the basic rate, you claim the rest yourself, through a Self Assessment tax return or by contacting HMRC. In the example above, £3,000.00 goes into the pension, it costs £1,800.00 of take-home pay, and £600.00 of the relief has to be claimed from HMRC.

With a net pay arrangement, your employer takes the contribution from your pay before Income Tax, so you get relief at your highest rate straight away and have nothing to claim. If you earn less than your Personal Allowance, you pay no tax to save, so this method gives you no relief.

With salary sacrifice, you agree to a lower salary and your employer pays the difference into your pension. You pay less Income Tax and less National Insurance, so the cost to you is lower again.

Relief you might be missing

With relief at source, higher and additional rate taxpayers only get the extra relief if they claim it. In Scotland, taxpayers above the basic rate can claim too, including those on the intermediate rate; the calculator does not include that extra Scottish relief. The extra relief covers contributions up to the amount of income you paid the higher rate on, which the calculator allows for.

The salary sacrifice calculator compares a sacrifice with your current pay, and the take-home pay calculator shows your full payslip with any pension. If you earn over £100,000, the guide to the 60% tax trap explains why pension contributions are worth more in that range. The pension take-home calculator works out income in retirement, and NHS staff can use the NHS pension calculator.

What it leaves out

Official guidance

Report a mistake

We will receive the page address and the tax year. We will not receive the figures you entered.

Please do not include your name or contact details. To get a reply, email [email protected] instead.

Spotted a mistake?

Email [email protected]. Tell us what you entered and what you expected to see. Fixed errors are listed on the corrections page.