How does pension tax relief work in 2025/26?

Under relief at source, your pension provider adds 20% basic-rate relief, so a £80 net contribution becomes £100 gross — a 25% top-up of the net amount. Higher-rate taxpayers reclaim a further 20%, and additional-rate taxpayers a further 25%, through Self Assessment.

How much can I pay into a pension tax-free?

The annual allowance is £60,000 (or 100% of earnings if lower). For high earners it tapers by £1 for every £2 of income above £260,000, down to a £10,000 floor at £360,000 of income. Contributions above the allowance face a tax charge.

How much relief does a higher-rate taxpayer get?

A higher-rate (40%) taxpayer gets the 20% top-up at source plus another 20% reclaimed, so a £100 gross contribution effectively costs about £60. An additional-rate (45%) taxpayer reclaims a further 25%, costing about £55 per £100.

What is the difference between net and gross contributions?

The net amount is what you actually pay in; the gross is the net plus the 20% basic-rate top-up. Gross = net ÷ 0.8. The annual allowance is measured against the gross contribution, not the net.

UK Pension Tax Relief Calculator

Email me this result

Get this tool's output sent to your inbox, plus one useful tool a week. No spam, unsubscribe any time.

UK pension contributions attract tax relief at your marginal rate. This calculator applies the 2025/26 relief-at-source top-up plus higher- and additional-rate relief, and checks your contribution against the annual allowance.

How it works

With relief at source, the pension provider adds 20% basic-rate relief, so your gross contribution is the net amount divided by 0.8 (a 25% top-up of the net). Higher-rate taxpayers reclaim a further 20% and additional-rate taxpayers a further 25% on the part of the gross contribution that falls in those bands.

gross = net ÷ 0.8           (basic-rate top-up = 25% of net)
higher relief = 20% of gross in the 40% band
additional relief = 25% of gross in the 45% band

The £60,000 annual allowance is measured against the gross contribution and tapers by £1 for every £2 of income above £260,000, down to £10,000.

Example

A higher-rate taxpayer on £60,000 paying £8,000 net gets a £2,000 top-up at source (gross £10,000), then reclaims a further 20% on the part of the £10,000 that sits in the 40% band — about £1,946 here — so total relief is roughly £3,946 and the real cost is around £6,054 for £10,000 in the pension.

Notes

Estimate only, not financial advice. Models 2025/26 relief-at-source pensions with the basic-rate top-up, higher- and additional-rate reclaim, and the £60,000 annual allowance tapering above £260,000. Net-pay arrangements and salary sacrifice give relief differently, and carry-forward of unused allowance is not modelled. Verify at gov.uk.