Pension tax relief calculator

How pension tax relief is worked out

Pension contributions are treated as if they were paid out of your income before tax, so the government gives back the tax you paid on that money. How you receive it depends on how your pension is set up:

• Relief at source. You pay from your take-home pay, and your provider claims 20% from HMRC and adds it to your pension: £80 from you becomes £100. If you pay tax above the basic rate, you claim the rest from HMRC. Personal pensions, SIPPs and many workplace pensions work this way.
• Net pay. Your employer takes the contribution from your pay before working out income tax, so you get relief at your highest rate automatically, with nothing to claim.

For relief at source, the calculator works out the extra relief the way HMRC does: it extends your tax bands by the amount going into your pension (including the provider's 20%) and compares your tax bill before and after. That means you only get higher-rate relief on income that's actually taxed at the higher rate.

Worked examples for 2026/27

Each example assumes relief at source and no other income.

The higher-rate example shows why the answer isn't always a neat 40%. On a £60,000 salary, only £9,730 of income is taxed at 40%, so higher-rate relief applies to that much of the £10,000 contribution and basic-rate relief to the rest.

Why earners between £100,000 and £125,140 get the most relief

Your Personal Allowance shrinks by £1 for every £2 of income over £100,000, which creates an effective tax rate of 60% on that slice of income. Pension contributions reduce the income used for this test, so they can win back some or all of the allowance. In the £110,000 example, the allowance is cut to £7,570. Paying £8,000 into a pension restores it in full, so the £10,000 going into the pension costs just £4,000 once the extra £4,000 is claimed back.

Pension tax relief for Scottish taxpayers

Scotland has six income tax rates in 2026/27, from a starter rate of 19% to a top rate of 48%. Pension providers still add 20% for everyone, so starter-rate taxpayers keep a little more relief than they paid in tax. Above the basic rate, you can claim the difference: 1% at the intermediate rate (21%), 22% at the higher rate (42%), 25% at the advanced rate (45%) and 28% at the top rate (48%), on the income taxed at those rates. Choose Scotland in the calculator to use these bands.

How to claim the extra relief

If you pay tax above the basic rate and your pension uses relief at source, the extra isn't added automatically. Claim it on your Self Assessment tax return, or, if you don't fill one in, by contacting HMRC, who may adjust your tax code. MoneyHelper says you can claim for the current tax year and the previous three. The extra relief reduces your tax bill rather than being paid into your pension.

Limits on pension tax relief

• You get relief on contributions up to 100% of your earnings in the tax year, or up to £3,600 including relief if you earn less than that.
• Total contributions to all your pensions, including your employer's, count towards an annual allowance of £60,000. Going over can trigger a tax charge, though you may be able to carry forward unused allowance from the previous three years.
• The allowance tapers down to £10,000 for very high earners (threshold income over £200,000 and adjusted income over £260,000), and falls to £10,000 once you start taking taxable money from a defined contribution pension.

What this calculator doesn't include

• Employer contributions, which go into your pension on top and don't need tax relief.
• Salary sacrifice, which also saves National Insurance. From 6 April 2029, that saving will be limited to £2,000 of sacrificed pay a year.
• Other income such as rent, savings interest or dividends, which can change your tax band.
• The HMRC top-up for low earners in net pay schemes. From 2024/25, people whose income is too low to pay tax can claim a top-up, which this calculator doesn't add.

Our guide to pension tax relief explains the rules in more detail, and our guide to SIPPs covers setting up your own pension.

Sources

• GOV.UK: Tax on your private pension contributions, tax relief
• HMRC: Pension schemes rates and allowances
• Finance Act 2004, section 192: relief at source and band extension (incl. Scotland, s.192(4A))
• HMRC Pensions Tax Manual PTM044220: relief at source
• GOV.UK: Income Tax rates and Personal Allowances
• GOV.UK: Scottish Income Tax
• GOV.UK: Annual allowance
• MoneyHelper: Tax relief and your pension

This calculator gives illustrations based on the figures you enter and the tax rules shown. It isn't personal financial advice. Our guides are general information and education, not personal financial advice. If you are unsure whether an investment is right for you, speak to a regulated financial adviser.