Pensions and tax relief
Where should I start?
Read Pension Tax Relief Explained for the three common methods, then Salary Sacrifice if your employer offers it. Pension Annual Allowance Explained covers contribution limits, taper and carry forward. Employer Pension Contributions covers company-side payments.
- Employee choosing how relief appears on a payslip: Start with Pension Tax Relief Explained to compare salary sacrifice, net pay and relief at source.
- Employer offers salary sacrifice: Read Salary Sacrifice Explained for Income Tax, NI and the caveats that matter before you opt in.
- Checking contribution limits: Read Pension Annual Allowance Explained for the £60,000 standard limit, taper, carry forward and the money purchase annual allowance.
- Director or company paying into a pension: See Employer Pension Contributions Explained, then model extraction with the Director Salary & Dividend Calculator. Check annual allowance separately.
Featured calculators
- Pension Annual Allowance & Carry Forward CalculatorWork out your pension annual allowance, tapered allowance, unused carry forward and whether your pension savings may exceed your available allowance.Open calculator
- Income Tax CalculatorEstimate take-home pay, Income Tax and employee National Insurance from a gross salary — with optional pension and student loan settings.Open calculator
- Net to Gross Salary CalculatorWork backwards from a target take-home figure to find the gross salary (and employer cost) you would need.Open calculator
Featured guides
- Pension Tax Relief ExplainedRelief at source, net pay and salary sacrifice — how pension contributions get tax relief in the UK.Read guide
- Salary Sacrifice ExplainedHow salary sacrifice pensions reduce taxable pay and National Insurance, and what to check before agreeing.Read guide
- Pension Annual Allowance ExplainedHow the UK pension annual allowance works — standard limit, taper, carry forward, MPAA and what happens if you exceed it.Read guide
All guides in this topic
- Pension Tax Relief ExplainedRelief at source, net pay and salary sacrifice — how pension contributions get tax relief in the UK.Read guide
- Salary Sacrifice ExplainedHow salary sacrifice pensions reduce taxable pay and National Insurance, and what to check before agreeing.Read guide
- Pension Annual Allowance ExplainedHow the UK pension annual allowance works — standard limit, taper, carry forward, MPAA and what happens if you exceed it.Read guide
- Employer Pension Contributions ExplainedHow company-paid pension contributions work for tax, National Insurance, Corporation Tax and annual allowance.Read guide
Frequently asked questions
Does salary sacrifice always save the most?
It often reduces both Income Tax and NI, but it can affect mortgage affordability, maternity pay and other salary-linked benefits. Compare with net pay and relief at source.
Do employer contributions get tax relief?
Employer contributions are usually an allowable company expense and are not treated as employee taxable pay when paid within the rules.
Will a pension change my required gross salary?
Yes. Employee contributions reduce take-home, so a Net to Gross target usually needs a higher gross if you contribute from pay.
Where do annual allowance limits fit?
Large contributions can interact with the annual allowance, taper and carry forward. Use the Pension Annual Allowance Calculator and read Pension Annual Allowance Explained for how limits work.
Latest guides
- Pension Annual Allowance ExplainedHow the UK pension annual allowance works — standard limit, taper, carry forward, MPAA and what happens if you exceed it.Read guide
- Pension Tax Relief ExplainedRelief at source, net pay and salary sacrifice — how pension contributions get tax relief in the UK.Read guide
- Salary Sacrifice ExplainedHow salary sacrifice pensions reduce taxable pay and National Insurance, and what to check before agreeing.Read guide
- Employer Pension Contributions ExplainedHow company-paid pension contributions work for tax, National Insurance, Corporation Tax and annual allowance.Read guide
Official HMRC resources
This hub is for general information only. It is not tax, legal or financial advice.