With a £3,800 gross contribution under relief at source, total pension tax relief is £1,520. Net cost to you: £2,280 (£190/month). Under salary sacrifice, the effective cost drops further to £2,204.
Use the full calculatorOn a £75,000 income you are a higher-rate taxpayer paying 40% on income above £50,270. Your marginal income tax rate is 40%.
Under relief at source, your provider claims 20% basic rate relief automatically from HMRC. You claim the additional 20% extra relief via Self Assessment — totalling £1,520 on a £3,800 contribution.
Under salary sacrifice, your gross salary is reduced by £3,800 before income tax and National Insurance are calculated. This saves you income tax and employee NI (saving an additional £76), bringing your effective net cost down to £2,204. Your employer also saves NI of £570 — some employers pass this saving into your pension.
Model your own figures — change income, contribution amount, method or region in the full calculator.
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