How pension tax relief works
Pension contributions are topped up by tax relief at your marginal rate. A basic-rate taxpayer pays just £80 for every £100 that lands in their pension; a higher-rate taxpayer effectively pays £60 and an additional-rate taxpayer £55.
Relief at source vs self-assessment
Basic-rate relief (20%) is usually added automatically (“relief at source”). Higher and additional-rate taxpayers claim the extra 20% or 25% through their self-assessment tax return — it doesn’t arrive in the pension automatically.
The annual allowance
You can usually get tax relief on contributions up to £60,000 a year (2025/26) or 100% of your earnings if lower. Very high earners may have a tapered allowance.
Frequently asked questions
What does “gross contribution” mean?
The total amount that ends up invested in your pension, including the tax relief. The calculator shows what that costs you net after relief.
How do higher-rate taxpayers get the extra relief?
Through their self-assessment tax return. The basic 20% is added at source; the extra 20% (higher) or 25% (additional) is reclaimed from HMRC.
Is there a limit on relief?
Yes — the annual allowance is £60,000 for 2025/26, reduced for very high earners and those already drawing a pension.