Pension Contributions
How pensions affect your take-home pay in 2025/26
Pension & Your Salary
Workplace pensions in the UK typically require a minimum 5% employee contribution (with 3% employer contribution under auto-enrolment).
Net Pay vs Salary Sacrifice
- Net Pay: Your pension contribution is deducted before income tax is calculated, giving automatic tax relief.
- Salary Sacrifice: Your contractual salary is reduced by the pension amount before both tax and National Insurance are calculated, saving an additional 8%/2% in NI.
Annual Allowance
The standard annual pension allowance is £60,000 for 2025/26. Contributions above this may incur a tax charge.
Use the full salary calculator to model different pension contribution rates and see the impact on your take-home pay.