Workplace pension calculator

What goes into your workplace pension from you, your employer and tax relief — and what it actually costs your take-home pay.

A 5% contribution does not cost you 5%. Part of it is money that would have gone in tax instead, and the employer contribution is on top of everything.

Your scheme documents will say which. Qualifying earnings is the common one.

3% is the legal minimum. Many employers pay more.

The short version

The minimums
8% in total under auto-enrolment: at least 3% from your employer and the rest from you.
Qualifying earnings
The statutory minimum applies only to the band from £6,240 to £50,270, not your whole salary.
Relief
Basic rate relief means £100 in the pension costs £80 of take-home. Higher rate costs £60.
Auto-enrolment trigger
You are enrolled automatically at £10,000 a year if you are 22 or over and under State Pension age.
Opting out
You can, but you give up the employer contribution entirely. It is the only part nobody replaces.

Common questions

How much do I actually have to contribute?

Auto-enrolment requires 8% of qualifying earnings in total, with at least 3% from your employer. In practice that usually means 5% from you, of which part is tax relief rather than take-home pay. Many employers pay more than the 3% minimum.

What does a 5% contribution really cost me?

About 4% of the contribution base if you are a basic rate taxpayer, because a fifth of it is tax you would have paid anyway. For a higher rate taxpayer it is about 3%. And the employer contribution comes on top at no cost to you at all.

Why is my contribution not 5% of my whole salary?

Most schemes use qualifying earnings, which only counts the band between the lower and upper limits. On a £30,000 salary that band is about £23,800, so 5% is roughly £1,190 rather than £1,500. Some employers contribute on full pay, which is more generous for the same headline percentage.

Should I opt out?

Opting out means giving up the employer contribution, which is money nobody else replaces — it is the closest thing to a pay rise you can decline. If affordability is the problem, ask whether you can reduce your contribution rather than leave the scheme, though below the minimum the employer duty may fall away.

What is salary sacrifice and is it better?

You give up gross pay and your employer pays it into the pension instead. Because the money never counts as salary, neither of you pays National Insurance on it, so the same contribution costs you less and costs your employer less too. It can affect anything based on gross salary, such as a mortgage application or statutory maternity pay.

Do I get higher rate relief automatically?

Only under a net pay or salary sacrifice arrangement. Under relief at source the scheme claims basic rate for you and you have to claim the rest through Self Assessment — which a lot of higher rate taxpayers never do.

What the terms mean

Qualifying earnings
The band of pay auto-enrolment contributions are worked out on, from a lower limit to an upper one rather than from the first pound.
Auto-enrolment trigger
The earnings level at which an employer must enrol you automatically. Below it you can still ask to join.
Relief at source
Your contribution comes from pay after tax and the scheme reclaims basic rate relief. Higher-rate taxpayers must claim the rest themselves.
Net pay arrangement
Your contribution comes out before income tax, so relief is given at your full rate automatically. It saves no National Insurance.
Salary sacrifice
You give up gross salary in exchange for an employer contribution. It saves both income tax and National Insurance, for you and your employer.
Annual allowance
The most that can go into your pensions in a year with tax relief, counting employer contributions. Exceeding it creates a tax charge.

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