Pension tax relief calculator
What a pension contribution really costs after relief, including the 60% band between £100,000 and £125,140 and the National Insurance salary sacrifice saves.
Covers 2026-27 tax year · rates as at 2026-04-06
What it actually costs you
Estimate£4,000.00
60% effective relief on 10,000
- Total tax relief
- £6,000.00
- Claimed through your return
- £4,000.00
- Annual allowance
- £60,000
| Gross contribution | £10,000 |
|---|---|
| Basic rate relief at source | -£2,000.00 |
| Higher and additional rate relief | -£4,000.00 |
| Net cost to you | £4,000.00 |
- Part of this contribution falls in the £100,000 to £125,140 band, where relief is 60% because the contribution also restores personal allowance.
- Unused allowance from the previous three tax years can be carried forward.
At £110,000 a £10,000 contribution attracts 60% relief — it costs you £4,000, because it restores personal allowance as well as cutting taxable income.
How this is calculated
How this is calculated
The 60% band is the best relief available
Between £100,000 and £125,140 every £2 earned removes £1 of personal allowance. Contributing reverses that: £10,000 into a pension cuts tax by £4,000 at 40% and restores £5,000 of allowance worth another £2,000 — £6,000 in total.
relief = 40% + 20% from restored allowance = 60%Only 20% arrives automatically
Your provider adds basic rate relief at source. Everything above it — 20 more points at higher rate, 40 more inside the taper — must be claimed through self assessment. Large sums go unclaimed every year because nobody files for them.
Salary sacrifice adds the National Insurance
A personal contribution relieves income tax only. Sacrificing salary reduces gross pay, so it also avoids 8% National Insurance below £50,270 and 2% above — worth £200 on a £10,000 contribution at this salary.
Worked example: £110,000 salary with a £10,000 pension contribution
| Salary | £110,000 |
|---|---|
| Contribution | £10,000 |
| Method | Personal |
| Relief rate | 60% |
|---|---|
| Total relief | £6,000 |
| Net cost | £4,000 |
The same £10,000 at a £70,000 salary attracts only 40% relief and costs £6,000. The band you are in matters more than the amount you contribute.
What this assumes
- A relief-at-source personal pension unless sacrifice is selected.
- Salary is the only income.
- Contribution within the annual allowance.
- Rest-of-UK rates; Scotland differs.
Where this commonly goes wrong
- The annual allowance itself tapers above £260,000 of adjusted income, falling to a £10,000 floor — contributing past it triggers a charge at your marginal rate.
- Higher-rate relief is not automatic and is lost if you never file; it can only be reclaimed for four earlier tax years.
- Taking any taxable income from a pension flexibly cuts your annual allowance to the money purchase limit permanently, which cannot be undone.
Questions
How much tax relief do I get on pension contributions?
Your marginal rate — 20%, 40% or 45% — except between £100,000 and £125,140 where it is 60%, because the contribution also restores personal allowance. On £10,000 at £110,000 that is £6,000 of relief.
Why is pension relief 60% between £100,000 and £125,140?
The personal allowance falls by £1 for every £2 above £100,000. A £10,000 contribution cuts tax by £4,000 at 40% and restores £5,000 of allowance worth £2,000 more, so the total relief is £6,000.
Do I have to claim higher-rate relief?
Yes. Your provider adds only the basic 20% at source; the remainder comes through self assessment. Large amounts go unclaimed every year, and you can only go back four tax years to recover it.
Is salary sacrifice better than a personal contribution?
Usually. Both get income tax relief, but sacrifice also avoids National Insurance — 8% below £50,270 and 2% above, worth about £200 on £10,000 at a £110,000 salary. Many employers add their own NI saving too.
What is the pension annual allowance?
£60,000 a year including employer contributions, tapering by £1 for every £2 of adjusted income above £260,000 down to a £10,000 floor. Unused allowance from the previous three years can be carried forward.
What happens if I contribute more than the allowance?
The excess is added to your taxable income and charged at your marginal rate, cancelling the relief. Carry-forward from the previous three tax years is usually the first thing to check before assuming a charge applies.
Related tools
Sources
General estimate based on published HMRC rates for 2026-27 tax year. Not tax advice. Confirm your position with HMRC or a qualified adviser.
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