Pension Tax Relief calculator

What is the Private Pension Tax Relief?

Pension tax relief lowers the tax you pay on money you put into a pension. How you get it depends on how your pension is set up.

A private pension is a pot you save into for retirement. You set it up yourself, not through your employer. Our partners Penfold and Guiide offer private pensions if you want to start one. A private pension matters most if you’re self-employed.

There are three main ways relief reaches you:

• Relief at source: used by personal pensions, including SIPPs, and some workplace pensions. You pay from your take-home pay. Your provider claims 20% from HMRC and adds it to your pot.
• Net pay: used by many workplace pensions. Your employer takes contributions from your pay before Income Tax, so you get the relief on your payslip.
• Salary sacrifice: you give up part of your salary, and your employer pays that amount into your pension. It is not taxed as salary.

If you’re a higher or additional rate taxpayer: with a relief at source pension, only the basic 20% is added automatically. You need to claim the rest from HMRC, through your Self Assessment tax return or HMRC’s online claim service (for the current tax year).

How pension tax relief works: the basics

Relief at source, net pay and salary sacrifice each reach you in a different way, and higher earners may need to claim more.

Relief at source vs net pay

Your scheme type decides how relief reaches you. If you’re unsure, check with your employer or pension provider.

• Relief at source: used by personal pensions, including SIPPs, and some workplace pensions. Your provider claims 20% basic rate relief from HMRC and adds it to your pot.
• Net pay: common in workplace pensions, though this varies by scheme. Your employer takes contributions from your pay before Income Tax, so you get the relief on your payslip straight away.
• Salary sacrifice: you give up part of your salary in exchange for employer pension contributions. You save Income Tax and National Insurance on that amount. From 6 April 2029, only the first £2,000 a year will be exempt from National Insurance.

What happens if you’re a higher or additional rate taxpayer?

• Net pay and salary sacrifice: higher and additional rate relief is applied through payroll, so there is nothing extra to claim.
• Relief at source: only the basic 20% is added automatically. To claim the rest, you can:
  • Use your Self Assessment tax return, if you already file one. You must claim through the return in this case.
  • Use HMRC’s online claim service, if you don’t file Self Assessment. It covers the current tax year.
  • Claim by post, if you can’t claim online

Depending on how you claim, HMRC will send you a rebate, reduce your tax bill, or change your tax code.

The same routes apply if you live in Scotland, but the extra relief depends on your Scottish rate. Scottish Income Tax rates are 19%, 20%, 21%, 42%, 45% and 48%. Your provider still claims the basic 20%, and if you pay the 19% starter rate, you don’t pay the difference. Scottish taxpayers above the basic rate can claim an extra 1% at 21%, 22% at 42%, 25% at 45% (the same as the UK additional rate) and 28% at 48%. Scottish Income Tax applies to wages, pensions and most other income, while dividends and savings are taxed at UK rates.

The £100k–£125k trap (and how pensions help)

In 2026/27, you lose £1 of Personal Allowance for every £2 of adjusted net income above £100,000. The allowance reaches zero at £125,140.

This makes income in this range taxed at an effective 60%: 40% Income Tax, plus the 20% effect of losing allowance. In practice, every £100 of gross pension contributions in this range can cut your tax bill by about £60.

Adjusted net income is your taxable income after certain deductions, including gross pension contributions paid under relief at source. Pension contributions reduce it, which can bring back part or all of your Personal Allowance.

Example: your salary is £110,000. You pay £8,000 net into a relief at source pension, which is £10,000 gross. Your adjusted net income falls to £100,000, so your Personal Allowance rises from £7,570 to £12,570. That recovers £5,000 of allowance and saves about £2,000 in tax. You also get £4,000 in relief: £2,000 added automatically and £2,000 claimed from HMRC.

How much can you claim?

In 2026/27, you can pay up to £60,000 a year into your pensions and get tax relief on it. Relief is capped at 100% of your earnings, so if you earn less than £60,000, that is your limit. If you have little or no income, you can still pay £2,880 a year. Your provider adds 20%, so £3,600 goes into your pot.

Your allowance is reduced only if both of these apply:

• Threshold income is over £200,000: your income, after taking off pension contributions paid under relief at source.
• Adjusted income is over £260,000: your income plus all pension contributions, including those your employer pays.

If both apply, your allowance drops by £1 for every £2 of adjusted income above £260,000, to a minimum of £10,000. For example, if your salary is £280,000 and your employer pays £20,000 into your pension, your adjusted income is £300,000. Your allowance falls to £40,000.

If only one condition applies, your full £60,000 allowance still applies. For example, a salary of £180,000 with £90,000 paid in by your employer gives an adjusted income of £270,000, but a threshold income of £180,000. There is no reduction.

You can carry forward unused allowance from the previous three tax years. If you pay in more than your allowance, you may face a tax charge, which your provider can pay for you. You can still claim relief on those contributions through your Self Assessment return.

To claim extra relief as a higher or additional rate taxpayer, use your Self Assessment return. If you don’t file one, use HMRC’s online claim service.

Taxfix connects you with UK-qualified tax accountants who can check your figures.

Do I need to file a tax return to claim pension relief?

It depends on your pension type as well as your tax band. If you pay higher or additional rate tax and your pension uses relief at source, you need to claim the extra relief from HMRC.

You may need to take action if:

• You’re a higher-rate taxpayer (income of £50,271 to £125,140 in 2026/27) with a relief at source pension. You’ll need to claim the extra 20%.
• You’re an additional-rate taxpayer (income over £125,140) with a relief at source pension. You’ll need to claim the extra 25%.
• You earn over £100,000 and want pension contributions to restore part of your Personal Allowance. This may mean filing a return.
• You already file Self Assessment for other reasons. You can claim your pension relief on the same return.

You don’t need to take extra action if:

• You’re a basic-rate taxpayer. Your provider adds the 20% automatically.
• Your pension uses net pay or salary sacrifice. Higher-rate relief is already applied through payroll.

If your pension uses relief at source, there are three ways to claim:

• Self Assessment: if you already file a return.
• HMRC’s online claim service: if you don’t file Self Assessment. It covers the current tax year.
• By post: if you can’t claim online.

Not sure if you need to file? Use our Self Assessment checker or speak to a Taxfix accountant.

Common pension tax relief scenarios

These examples show how the figures work in practice. All figures are gross, meaning the total that goes into your pension, including relief. They assume a relief at source pension and England, Wales or Northern Ireland tax rates for 2026/27. Scottish rates differ.

Scenario 1: Basic rate taxpayer

• Salary: £35,000
• Net contribution: £2,000
• Automatic relief added by your provider (20%): £500
• Total in your pension (gross): £2,500
• Additional relief to claim: £0

There is nothing more to do. Relief is applied automatically.

Scenario 2: Higher rate taxpayer

• Salary: £70,000
• Net contribution: £5,000
• Automatic relief added by your provider (20%): £1,250
• Gross contribution into your pension: £6,250
• Additional higher-rate relief to claim (20% of £6,250): £1,250
• Total relief: £2,500

To claim the extra £1,250, use your Self Assessment return, or HMRC’s online service. The online service can also adjust your tax code for the current tax year.

Scenario 3: High earner in the Personal Allowance taper zone

• Salary: £110,000
• Net contribution: £8,000
• Automatic relief added by your provider (20%): £2,000
• Gross contribution into your pension: £10,000
• Additional higher-rate relief to claim (20% of £10,000): £2,000
• Personal Allowance recovered: £5,000, which saves about £2,000 in tax at 40%
• Total tax relief and tax saved: £6,000, which is 60% of the £10,000 gross contribution

Your take-home pay falls by about £4,000, not £8,000, once the tax saving is included. To claim the extra £2,000, use the same routes as Scenario 2.

How to claim your additional pension tax relief

• Check your pension type. If your pension uses net pay or salary sacrifice, higher-rate relief is already applied through payroll. If it uses relief at source, read on.

• Check your eligibility. You can claim extra relief if you pay higher or additional rate tax. If you earn over £100,000, contributions may also restore part of your Personal Allowance, so it’s worth checking.

• Gather your contribution details. Your provider’s annual statement shows your gross contributions for the tax year.

• Choose how to claim:

1. 1. • Self Assessment tax return: use this if you already file, or if you have other reasons to file, such as income over £100,000 or investment income.
      • HMRC’s online claim service: use this if you don’t file Self Assessment. It can apply the relief through your tax code for the current tax year.
      • Or use Taxfix: our UK-qualified accountants can check your return and help you claim what you’re entitled to.

• Wait for HMRC’s response. For online claims, HMRC will contact you within 28 working days. It will then either send you a rebate, reduce your next tax bill, or change your tax code, depending on how you claimed.