Pension contribution calculator
A pension percentage is hard to picture. This turns your employee and employer percentages into the real monthly and yearly amount going into your pension, with basic-rate tax relief added.
How the contribution adds up
Three parts go into a relief-at-source pension. First, your own contribution, taken as a percentage of your salary from pay you have already been taxed on. Second, the basic-rate tax relief the provider claims from HMRC and adds to your part, which is 20% relief, meaning your contribution is grossed up by dividing by 0.8. Third, your employer’s contribution, paid on top as a separate percentage. The total that lands in the pension is the three added together.
The relief works because the government wants to hand back the income tax you paid on money you have chosen to save. If you are a higher or additional-rate taxpayer, the provider still only adds the 20%. You claim the rest through Self Assessment. This calculator shows the automatic basic-rate figure, which is what most people see arrive in their pot.
Worked example
On a £35,000 salary with a 5% employee contribution and 3% from the employer, you put in £1,750 a year from your pay. The provider adds £438 of basic-rate relief, lifting your part to £2,188. Your employer adds £1,050. Altogether £3,238 goes into your pension across the year, about £270 a month, worth 9.3% of your salary.
Common questions
How is the amount into my pension worked out?
Your employee percentage is taken from your pay, your employer adds their percentage on top, and for a relief-at-source pension the provider adds 20% basic-rate tax relief to your part. Adding the three together gives the total that lands in your pension.
What is relief at source?
It is how most workplace and personal pensions add tax relief. You pay your contribution from taxed pay, then the provider claims 20% back from HMRC and adds it to your pot. So a £1750 contribution becomes £2188 once the relief is added.
What if I pay higher-rate tax?
Under relief at source, only the 20% basic-rate relief is added automatically. A higher or additional-rate taxpayer claims the extra relief separately through Self Assessment or by contacting HMRC. This tool shows the automatic basic-rate top-up only.
Is this the same as salary sacrifice?
No. Salary sacrifice lowers your gross pay instead, so it saves National Insurance as well as income tax and no relief is added afterwards. If your scheme uses salary sacrifice, the figures work differently.