Pension Contribution & Tax Relief Calculator
See your tax relief, the real cost to your take-home pay, and a projected pension pot.
Suggested from your salary — change it if you have other income or pay Scottish rates.
Projection settings
Projected pot growth
| Year | Projected pot value |
|---|
How the pension tax relief calculator works
Enter your annual salary, the percentage you contribute to your pension, and your marginal tax band. The calculator works out the gross amount that goes into your pension, the tax relief added at your rate, and the actual reduction to your take-home pay — which is always less than the contribution itself, because tax relief effectively refunds the tax you'd otherwise have paid on that money.
Add an optional employer contribution percentage to see the combined amount going into your pot each year, and adjust the projection settings to see how your pot could grow over time with compound investment returns.
Tax relief rates by band
This calculator assumes a "net pay" style workplace pension, where relief is given automatically at your full marginal rate through your payslip. Under a "relief at source" scheme, only basic-rate relief is added automatically — higher and additional-rate taxpayers must claim the rest via Self Assessment.
Frequently asked questions
How does pension tax relief work?
The government tops up your pension contributions with tax relief at your marginal income tax rate — 20% for basic-rate taxpayers, 40% for higher-rate, and 45% for additional-rate. This means a contribution costs you less from your take-home pay than the amount that actually goes into your pot.
Why is my net cost lower than my contribution amount?
Tax relief effectively refunds the income tax you'd otherwise have paid on that portion of your salary. A higher-rate taxpayer contributing £100 only sees their take-home pay fall by £60, because the other £40 is tax they'd have paid anyway.
Do higher-rate taxpayers need to claim extra relief separately?
It depends on your scheme. Under a "net pay" workplace scheme (most common), contributions come out of salary before tax is calculated, so relief is automatic. Under "relief at source" schemes, only basic-rate relief is automatic — the rest must be claimed via Self Assessment.
Is the projected pot value guaranteed?
No. The projection assumes a constant annual growth rate and constant contributions every year, which is a simplification — real investment returns vary and your salary or contribution rate may change. Treat it as an illustration, not a guarantee.
Does this calculator account for the pension annual allowance?
No. Most people can contribute up to £60,000 a year (or 100% of earnings if lower) across all pensions and still get tax relief, though this can be lower for high earners due to the tapered annual allowance. This tool doesn't check contributions against that limit.