Pension Contribution Calculator — 2026/27
A pension contribution costs you less than you think: because contributions through a net pay arrangement come out before income tax, a £100 contribution reduces your take-home by £80 if you are a basic-rate taxpayer — and by just £60 if you pay 40% tax, because the tax you save is at your highest rate. Enter your salary and a pension percentage to see your own figures.
| Gross salary | — |
|---|---|
| Personal Allowance | — |
| Income tax | — |
| National Insurance | — |
| Pension | — |
| Student loan | — |
| Overall deduction rate | — |
Income tax by band
| Band | Taxed amount | Tax |
|---|
Pension is modelled as a net pay arrangement (it reduces taxable pay, not National Insurance). Student loan thresholds 2026/27: Plan 1 £26,900 · Plan 2 £29,385 · Plan 4 £33,795 · Plan 5 £25,000 · Postgraduate £21,000.
Why the percentage matters more as you earn more
Between £100,000 and £125,140, pension contributions do double duty: they also restore your Personal Allowance, because the allowance taper is based on income after pension contributions. Contributing enough to bring your adjusted income to £100,000 can turn an effective 60% tax rate back into 40% — one of the few legal ways around the trap. See the 60% tax trap guide for a worked example.
This calculator models a net pay arrangement (common in larger employers and public schemes): the contribution reduces taxable pay but not National Insurance. With relief-at-source schemes (many personal pensions) the take-home effect is slightly different; with salary sacrifice it is slightly better, because National Insurance falls too.
Frequently asked questions
How much does a 5% pension contribution cost on £40,000?
5% of £40,000 is £2,000 a year into your pension. Through a net pay arrangement your take-home falls by £1,600 — the other £400 is income tax you no longer pay. Try it in the calculator.
What is the minimum auto-enrolment contribution?
The legal minimum is 8% of qualifying earnings (band earnings between £6,240 and £50,270), with at least 3% from your employer. Many employers contribute more, and many staff choose to add more.
Do pension contributions affect my student loan?
Not under net pay or relief at source — repayments stay based on gross pay. Under salary sacrifice they do fall, because your contractual salary is lower.