UK Pension Contribution
Calculator 2026/27
Compare salary sacrifice vs relief at source side by side. See your tax saving, NI saving and the real cost of contributing to your pension.
Enter your pension contribution as a percentage of salary
Salary sacrifice vs relief at source — what is the difference?
Both methods get money into your pension with tax relief, but salary sacrifice is more efficient because it also saves National Insurance. With salary sacrifice, your employer reduces your gross salary before calculating tax and NI. With relief at source, contributions come from your post-tax pay and the government adds 20% basic rate tax relief directly to your pension pot.
Why salary sacrifice wins for most people
A basic rate taxpayer contributing 5% via salary sacrifice saves both income tax (20%) and National Insurance (8%), so every £1 that goes into their pension only costs them 72p from their take home. With relief at source, every £1 into the pension costs 80p because NI is not saved.
Higher rate and additional rate taxpayers save even more through salary sacrifice. A higher rate taxpayer saves 42p per pound (40% tax plus 2% NI) — and can claim an additional 20% relief through their tax return for relief at source contributions made at the basic rate.
Employer NI savings with salary sacrifice
Salary sacrifice also saves your employer 13.8% NI on the sacrificed amount. Many employers pass some or all of this saving back to employees as an enhanced employer contribution. It is worth asking your HR team whether your employer does this — it can significantly boost the total going into your pension.
Related calculators
Pension contributions directly reduce your take-home pay, so start with the main salary calculator to see your baseline. The take home pay calculator shows your net pay before and after pension is applied. Because contributions also reduce your National Insurance, our National Insurance calculator shows the NI saving in detail. Your income tax calculator confirms the income tax relief, especially important if you are approaching the higher rate threshold. Repaying a student loan alongside a pension? Our student loan calculator shows how both deductions interact. A forthcoming pay rise will change all these figures — re-run with our pay rise calculator. Weighing up saving into a pension versus saving for a property? Our savings goal calculator shows deposit timelines, and our mortgage affordability calculator shows how pension contributions (which reduce your gross) can affect lender income assessments.
Frequently asked questions
Salary sacrifice is an arrangement where your employer reduces your gross salary by your pension contribution before calculating tax and NI. This means you save both income tax and National Insurance on the amount sacrificed, making it more tax-efficient than contributing from after-tax pay.
Potentially yes. Salary sacrifice reduces your official gross salary, which some lenders use to calculate how much they will lend you. If you are planning to apply for a mortgage, check with your lender how they treat salary sacrifice income. Some lenders add back sacrificed amounts; others do not.
The pension annual allowance is £60,000, or 100% of your earnings if lower. This is the maximum total contributions (yours plus your employer's) that can receive tax relief in a tax year. Exceeding this limit triggers an annual allowance charge.
Yes. You can increase your contribution above the minimum. Some employers will match higher contributions — for example, matching up to 5% or even 10%. Always check your employer's matching policy, as unmatched contributions still benefit from full tax relief but do not attract additional employer money.