Calculator

Pension Tax Relief Calculator 2026/27

Estimate pension tax relief under relief at source, net pay or salary sacrifice. See the income tax and NI savings and the net cost to your take-home pay.

Gross annual income

Annual pension contribution

Contribution method

Comparing the three methods

Salary sacrifice — you give up gross salary and your employer pays into pension. You save income tax and employee NI. Your employer also saves employer NI (15%), and some pass this on as extra pension.
Relief at source — you pay from net pay; your provider claims 20% basic rate relief from HMRC directly. Higher and additional rate taxpayers claim extra relief via Self Assessment. No NI saving.
Net pay arrangement — contributions deduct from gross pay before tax is applied, so you get full income tax relief immediately. No NI saving. Not available from all providers.

Salary sacrifice is usually the most tax-efficient because it saves NI as well as income tax. The trade-off is a lower contractual salary, which can affect mortgage affordability and certain state benefits.

Frequently asked questions

What is the pension annual allowance for 2026/27?

The annual allowance is £60,000 (or 100% of your earnings, whichever is lower). This covers all pension contributions — yours and your employer's combined. Unused allowance from the previous 3 tax years can be carried forward.

Do basic rate taxpayers get relief at source automatically?

Yes. With relief at source, your pension provider automatically reclaims 20% basic rate relief from HMRC, topping up your contribution. So a £800 net contribution becomes £1,000 in your pension. Higher and additional rate taxpayers must claim the extra relief (20% or 25%) via Self Assessment.

Which method is best for higher rate taxpayers?

Salary sacrifice is generally best if your employer offers it — you save both income tax and employee NI (2% above £50,270). If salary sacrifice is not available, net pay and relief at source both provide full income tax relief; the difference is primarily timing and process.

Does salary sacrifice affect my State Pension?

If your post-sacrifice salary falls below the Lower Earnings Limit (£6,396 in 2026/27) your NI record may be affected. Most employees earning a typical salary are not at risk, but it is worth checking if your post-sacrifice salary is very low.

Official sources

This calculator provides estimates only. It does not constitute financial, tax or legal advice. Always check current GOV.UK guidance and consult a qualified adviser before making decisions.