PensionTools UK

SIPP Tax Relief Calculator

Relief at source · higher-rate claims · personal allowance taper

How it works: pay £80 into a SIPP and HMRC adds £20 automatically — £100 invested. Higher and additional-rate taxpayers can then claim more back through self-assessment. Enter your income and contribution to see the full picture, including the 60% effective-relief zone above £100k.
£
Gross employment/self-employment income
£
The amount that leaves your bank account
Lands in your pension
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gross contribution
Automatic top-up
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added by your provider
Extra relief to claim
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via self-assessment
True cost to you
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after all relief
Cost per £1 invested
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effective price
Total relief rate
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of gross contribution
Where each £1 in your pension comes from

What this calculator shows

Pension tax relief is the strongest incentive in UK personal finance, but the mechanics confuse almost everyone. With a SIPP, relief arrives in two parts. The first is automatic: whatever you pay in is treated as net of basic-rate tax, so your provider claims 25% of your payment from HMRC and adds it to the pot. The second part only happens if you ask: higher and additional-rate taxpayers claim the difference through self-assessment, and it comes back to you as a refund or reduced tax bill rather than going into the pension.

The "true cost" figure is the one worth remembering — what the contribution costs you once every form of relief is counted. For a higher-rate taxpayer, £1 in a pension typically costs 60p; in the personal-allowance taper zone between £100,000 and £125,140 it can cost as little as ~40p. Read the full mechanics in our SIPP tax relief guide, and when you're ready to see what those contributions grow into, try the pension growth calculator.

Frequently asked questions

How does SIPP tax relief work?

Personal pensions and SIPPs use "relief at source". You pay in from taxed income, and your provider automatically adds basic-rate relief — 25p for every £1 you contribute (so £80 from you becomes £100 in the pension). If you pay tax at 40% or 45%, you claim the extra relief back through self-assessment or a tax code adjustment; it is refunded to you rather than added to the pension.

Why can the relief rate be more than 40%?

Between £100,000 and £125,140 of income, the personal allowance is withdrawn at £1 for every £2 earned — an effective 60% marginal rate. A pension contribution reduces the income used for that test, restoring allowance as well as saving higher-rate tax, so relief in that band can reach around 60%. This calculator handles the taper automatically.

How much can I contribute each year?

Tax relief is available on gross contributions up to 100% of your UK earnings, capped by the £60,000 annual allowance (unused allowance from the previous three tax years can sometimes be carried forward). If you have already flexibly accessed a pension, the lower £10,000 MPAA may apply instead.

Does this work for workplace pensions too?

It depends how your scheme takes contributions. Many workplace schemes use "net pay" or salary sacrifice, where full relief happens through payroll and there is nothing to claim. This calculator models relief at source — the method used by SIPPs and personal pensions.

This calculator is an illustration based on the figures you enter and the assumptions shown — it is not financial advice and no personal data leaves your device. Tax figures use England, Wales & NI income tax bands for the current tax year and assume the amounts shown are your only taxable income; Scottish bands differ. Investment returns are not guaranteed and tax rules can change. For decisions about your own pension, consider speaking to an FCA-regulated financial adviser. Full disclaimer.