Pension Contribution Tax Relief Calculator
Calculate your government pension top-up, higher-rate reclaim and effective contribution cost for 2026/27
Last updated: March 2026
Pension Tax Relief Calculator 2026/27
See exactly how much your pension contributions cost after HMRC top-ups and higher-rate relief
Annual Allowance Check
Relief at Source vs Net Pay Arrangement vs Salary Sacrifice
| Method | How Relief is Given | Higher Rate Relief | NI Saving |
|---|---|---|---|
| Relief at Source | Provider claims 20% from HMRC; contributions "grossed up" | Claim via self-assessment | No NI saving |
| Net Pay Arrangement | Contributions taken from gross pay before tax calculated | Automatic at marginal rate | No NI saving |
| Salary Sacrifice | Salary reduced before tax and NI; employer pays to pension | Automatic at full rate | Employee saves 8% NI; employer saves 13.8% |
Tax Relief Rates 2026/27 by Income Band
| Income Band | Tax Rate | Relief on £100 Contribution | Net Cost to You |
|---|---|---|---|
| Up to £12,570 | 0% (personal allowance) | £20 basic rate top-up* | £80 |
| £12,571 – £50,270 | 20% basic rate | £20 from HMRC | £80 |
| £50,271 – £125,140 | 40% higher rate | £20 RAS + £20 SA claim | £60 |
| Over £125,140 | 45% additional rate | £20 RAS + £25 SA claim | £55 |
* Under relief at source only. Net pay arrangement provides no relief for non-taxpayers. Scotland has different income tax bands (19%/20%/21%/42%/45%/48%).
The HMRC Reclaim Process for Higher Rate Taxpayers
If you pay 40% or 45% income tax and contribute to a relief at source pension (such as a SIPP), you need to claim the additional relief. Here is the process:
- Check your pension certificate: Your pension provider sends an annual statement showing gross contributions. Note the total gross amount (i.e., including the 20% basic rate top-up already added by the provider).
- Complete self-assessment: On your SA100 tax return, declare the gross pension contributions on the "Pension savings" pages. HMRC will apply relief at your marginal rate minus the 20% already given.
- Adjust your tax code: For ongoing contributions, you can ask HMRC to adjust your PAYE tax code so higher rate relief is given monthly through payroll. Call HMRC on 0300 200 3300 or use your personal tax account.
- Backdate claims: You can backdate pension tax relief claims up to 4 tax years. For 2026/27, you can still claim for 2022/23, 2023/24 and 2024/25.
Carry Forward — Boosting Contributions Beyond £60,000
If you have unused annual allowance from the previous 3 tax years, you can "carry forward" and contribute more than £60,000 in a single year. Rules:
- You must have been a member of a registered pension scheme in the year you are carrying forward from (even if you made no contributions)
- You must use the current year's allowance (£60,000) first before using carry forward
- Carry forward must be used from the earliest available year first
- Contributions are still capped at 100% of UK earnings in the contribution year
- Carry forward cannot be used to exceed the Money Purchase Annual Allowance (£10,000) if you have triggered the MPAA
Carry Forward Example: 2026/27
- 2023/24 unused allowance: £25,000 (only contributed £35,000)
- 2024/25 unused allowance: £20,000 (only contributed £40,000)
- 2025/26 unused allowance: £15,000 (only contributed £45,000)
- 2026/27 standard allowance: £60,000
- Maximum 2026/27 contribution: £60,000 + £25,000 + £20,000 + £15,000 = £120,000
- Earnings must be at least £120,000 for full contribution to receive relief
Annual Allowance and Tapered Annual Allowance for High Earners
For individuals with adjusted income above £260,000, the annual allowance tapers down:
- Threshold income: £200,000 (income excluding employer pension contributions)
- Adjusted income: £260,000 (income including all pension contributions)
- Taper rate: £1 reduction for every £2 of adjusted income above £260,000
- Minimum tapered AA: £10,000 (reached at adjusted income of £360,000)
- Salary sacrifice arrangements reduce adjusted income and can help avoid or reduce tapering
Salary Sacrifice: The Most Tax-Efficient Option
For employed workers with access to a salary sacrifice pension scheme, salary sacrifice is nearly always the most tax-efficient way to contribute:
Income Tax Saving
By reducing gross salary, your taxable income falls. A higher rate taxpayer saves 40% income tax. A basic rate taxpayer saves 20%. The saving is automatic — no self-assessment needed.
National Insurance Saving
Salary sacrifice also reduces National Insurance contributions. For 2026/27, employees save 8% NI on earnings between £12,570–£50,270 and 2% above that. Employers save 13.8% on the sacrificed amount.
Employer NI Boost
Many employers pass their NI saving (13.8%) back to employees by adding it to the pension contribution. This can increase total pension input by 10–15% over and above direct contributions.
Considerations
Salary sacrifice reduces your contractual salary. This can affect mortgage affordability calculations, income-based benefits, state pension contributions (if below NI threshold), and some DB final salary calculations. Always check before sacrificing large amounts.
Sources & Official References
Disclaimer: This calculator uses 2026/27 UK tax rates for England, Wales and Northern Ireland. Scottish income tax rates differ. This tool is for educational purposes only and does not constitute tax advice. Your actual relief may differ. Consult a qualified tax adviser or financial planner for personalised guidance.