Pension tax relief calculator, 2026/27

How this is calculated

Under relief at source, your pension provider automatically claims basic-rate relief of 20.0% from HMRC and adds it to your contribution. This calculator shows that amount first, then estimates any further relief due at your marginal rate, which is 40% or 45% once your income crosses the higher or additional rate thresholds.

Technically HMRC gives higher and additional rate relief by extending your basic-rate and higher-rate bands by the gross amount of the contribution, rather than issuing you a simple percentage refund, but the net effect on your tax bill is equivalent to the marginal-rate calculation shown here.

This further relief is not automatic. You must declare pension contributions on your self-assessment return, and HMRC then extends your bands accordingly, which either increases a repayment or reduces the tax you owe.

Directors and dividend income

Dividend income is taxed after salary in the order of income, so a large pension contribution can extend the basic-rate band available to dividends, potentially moving dividends from the higher 35.75% rate down to the ordinary 10.75% rate, which is a common tax planning point for director-shareholders.

This means the relief on a contribution can be worth more to a director with significant dividend income than the headline marginal rate on salary alone would suggest, because it can also affect how much dividend income is taxed at each rate.

Claiming what you are owed

If you only file a tax return because you are a director, make sure pension contributions are entered on the correct section of the return; missing this is one of the most common reasons directors underpay themselves in relief they are entitled to.

If you do not otherwise need to file a return, HMRC can sometimes adjust your tax code instead, but calling HMRC or writing to them is usually necessary to claim relief outside self-assessment.

Do I need to do anything to get basic-rate relief?

No, under a relief at source scheme your provider claims the 20% relief automatically and adds it to your contribution, usually within a few weeks of the contribution being made.

How do I claim higher-rate relief?

You must declare the gross amount of your pension contributions on your self-assessment tax return, which then extends your basic and higher-rate bands and either reduces your tax bill or increases a repayment.

Does an employer contribution get the same relief?

No, employer contributions are paid gross and do not need tax relief added because they were never taxed as your income in the first place, though they still count towards your annual allowance.

Can pension contributions affect my dividend tax rate?

Yes, extending the basic-rate band with a pension contribution can move some dividend income from the higher 35.75% rate to the ordinary 10.75% rate, increasing the effective value of the relief for director-shareholders.