Employer Pension Contribution CT Relief Calculator

Yes — employer pension contributions are generally fully deductible for Corporation Tax purposes, reducing the company's taxable profit by the contribution amount. They are treated as a business expense under CTA 2009 Chapter 4.

At 25% CT rate, the CT saving is 25p for every £1 contributed. For example, £50,000 employer pension contribution saves £12,500 in Corporation Tax. The net cost to the company is £37,500.

They must be: (1) paid to a registered pension scheme, (2) wholly and exclusively for the purposes of the trade, (3) made before 9 months after the company's accounting period end to get relief in that period, and (4) not for non-commercial purposes.

Yes — employer pension contributions can create or increase a trading loss. Such a loss can be carried back to the previous accounting period (1-year carry-back) or carried forward against future profits. There is also a 3-year carry-back for terminal losses.

HMRC may spread CT relief across multiple years if the contribution appears disproportionate to the director's commercial salary in the year. The relief is deducted over the 'spreading period', which can be up to 4 years for very large contributions (over £2M).

No — employer pension contributions are not subject to employer or employee NIC. This makes pension contributions more tax-efficient than salary: a £1 pension contribution costs the company £1, while a £1 salary increase costs approximately £1.15 (plus employer NIC at 15%).

There is no specific limit on employer pension contributions for CT purposes (unlike the employee annual allowance). However, employee annual allowance (£60,000 in 2025/26) still limits the amount that can be saved into a pension each year — employer contributions count towards this.

Contributions must be paid before 9 months after the company's accounting year-end. For a December year-end company, contributions must be paid by 30 September the following year. Pay within the accounting year itself for certainty.