How pension tax relief works

Summary

• Pension contributions receive tax relief at your marginal rate.
• You can enter the gross figure directly, or tick the "net amount" checkbox on a workplace pension/SIPP and enter what actually leaves your bank — the tool grosses it up for you.
• £800 net becomes £1,000 gross for a basic-rate taxpayer.
• Higher-rate relief via self-assessment is reflected in the effective contribution amount.

How relief is applied

Pension contributions receive tax relief at your marginal rate. You have two ways to enter a contribution on a workplace pension or SIPP: enter the gross figure directly (the amount that lands in your pension pot including relief), or tick "This is the net amount leaving my bank — gross up by 20% for tax relief at source" and enter the amount that actually leaves your account — the tool adds the 20% basic-rate top-up automatically. Either way, £800 net becomes £1,000 gross for a basic-rate taxpayer. Higher-rate taxpayers get additional relief via self-assessment, which is reflected in the effective contribution amount.

Frequently asked questions

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