Free Tool

Pension Contribution Calculator

Calculate tax relief on pension contributions. See the difference between personal and company contributions.

Updated for 2025/26 tax year • £60,000 annual allowance

Contribution Details

Annual allowance: £60,000 (may be reduced if income over £260k)

Company Contribution

Your Contribution£20,000
Tax Relief+£5,000
In Your Pension Pot£20,000
True Cost to You£15,000

Paid before corporation tax, reducing your tax bill

Why Company Contributions Often Win

No employer NI on pension (save 15%)
Reduces corporation tax bill
No personal tax on contribution

Optimize Your Extraction Strategy

AccountsOS calculates the optimal mix of salary, dividends, and pension contributions to minimize your total tax bill.

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Pension Contributions for Company Directors

As a limited company director, you have two main options for pension contributions:

Company Contributions (Employer)

  • Paid as a business expense, reducing corporation tax
  • No employer NI (saving 15% immediately)
  • No personal tax on the contribution
  • Must be "wholly and exclusively" for business purposes

Personal Contributions

  • Paid from your personal income (salary/dividends)
  • Basic rate tax relief added automatically (20%)
  • Higher rate relief claimed via Self Assessment
  • Limited to 100% of your relevant UK earnings

Annual Allowance

The annual allowance is £60,000 for 2025/26. If your "adjusted income" exceeds £260,000, your allowance is reduced by £1 for every £2 over the threshold, down to a minimum of £10,000.

Frequently Asked Questions

Common questions about UK pension contributions, tax relief, and allowances