Pension Tax Relief Calculator
Calculate your tax relief on pension contributions for the 2025/26 tax year. Compare Relief at Source, Net Pay, and Salary Sacrifice methods.
Understanding Contribution Methods
1. Relief at Source (RAS)
Your contribution is taken from your net pay (after tax). Your pension provider adds 20% basic rate tax relief automatically. If you're a higher or additional rate taxpayer, you claim the extra relief through Self Assessment or HMRC's online service.
Example: To add £100 to your pension, you pay £80. Provider adds £20 basic rate relief.
2. Net Pay Arrangement
Your contribution is taken from your gross pay before income tax is calculated. This means all tax relief is applied automatically through your payroll - no need to claim anything extra.
Note: Non-taxpayers in net pay schemes may receive a top-up payment from HMRC (paid to their bank account).
3. Salary Sacrifice
You agree to reduce your salary by the contribution amount, and your employer pays it into your pension instead. This saves both income tax and National Insurance. Many employers share some of their NI savings with you.
2029 change: From April 2029, NI relief will be limited to the first £2,000 sacrificed per year.
2025/26 Tax Rates (England, Wales & NI)
| Band | Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 - £50,270 | 20% |
| Higher Rate | £50,271 - £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Scotland uses different income tax rates. If you're a Scottish taxpayer, this calculator provides estimates only - seek specific advice for accurate calculations.
Annual Allowance
- • Standard allowance: £60,000 for 2025/26
- • Tapering: Reduced for high earners with threshold income over £200,000 and adjusted income over £260,000
- • Minimum allowance: £10,000 (after full tapering)
- • Low earners: Can contribute up to £3,600 gross even with low or no earnings
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