Calcsmith

    UK Pension Tax Relief Calculator — Methodology

    Last verified 5 May 2026 against HMRC pension tax relief guidance. Calculator at /uk/pension/pension-tax-relief-calculator/.

    What this calculator does

    Calculates the tax relief on a personal or workplace pension contribution under salary sacrifice, relief at source, or net pay arrangements, including additional higher-rate / additional-rate relief reclaimable through self-assessment.

    The formula

    Relief at source (RAS):
  netContribution × 1.25 = grossInPension   (basic-rate top-up)
  if higherRate taxpayer:
    extraRelief = grossInPension × (marginal - 0.20)
    (claimed via self-assessment; widens basic-rate band)

Net pay arrangement:
  contribution comes off salary BEFORE income tax
  relief = contribution × marginalRate
  (no NI saving)

Salary sacrifice:
  relief = contribution × (marginalRate + employeeNIRate)
  (employer NI saving may be passed back)

Annual allowance check:
  if total grossContribution > annualAllowance:
    chargeable = excess × marginalRate
  Tapered AA applies when adjusted income > £260,000.

    Authoritative sources

    Assumptions and limitations

    • Standard 2026/27 annual allowance of £60,000; tapered to a minimum of £10,000 above £260,000 adjusted income.
    • Money Purchase Annual Allowance (MPAA) of £10,000 applies once flexibly accessed — not detected automatically.
    • Carry-forward of unused allowance from the prior 3 tax years is not modelled.
    • Scottish taxpayers receive 20% relief at source; the additional intermediate (1%), higher (22%), advanced (25%), and top (28%) reliefs must be claimed via self-assessment.
    • Lifetime Allowance is abolished from 6 April 2024; LSA / LSDBA limits apply but are not modelled.

    Source data

    The rates used by this calculator are exported as machine-readable CSVs:

    These CSVs regenerate automatically from our canonical rate data at every build, ensuring the calculator output and the published rate data stay in sync.

    Verification log

    • 5 May 2026: Annual allowance, MPAA, and taper thresholds verified against gov.uk pension guidance

    Try the tool: UK Pension Tax Relief Calculator →