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Auto-Enrolment Pension Rules 2026/27
| Rule | Value |
|---|---|
| Qualifying earnings band | £6,240 – £50,270 |
| Earnings trigger for auto-enrolment | £10,000/year |
| Minimum total contribution | 8% of qualifying earnings |
| Typical split | 5% employee / 3% employer |
Under a "net pay arrangement" (the most common workplace pension setup), your contribution is deducted before tax, so you automatically get tax relief at your marginal rate — a higher-rate taxpayer effectively pays less out of pocket for the same pension contribution.
Employer Pension Contributions
Your employer's contribution is paid on top of your salary, not taken out of it. Under auto-enrolment the legal minimum employer contribution is 3% of qualifying earnings (£6,240–£50,270 for 2026/27), though many employers pay more or match higher employee contributions. Enter your employer's percentage above to see the full amount going into your pension — an employer pension contribution calculator or workplace pension contribution calculator is asking for exactly this employee % plus employer % split.
Relief at Source vs Net Pay
Workplace pension tax relief is applied in one of two ways. Under net pay, your contribution leaves gross salary before Income Tax is calculated, so you get full relief at your marginal rate straight away. Under relief at source, your contribution comes out of take-home pay and the provider reclaims 20% from HMRC on your behalf — higher and additional-rate taxpayers then have to claim the extra 20–25% through Self Assessment or by contacting HMRC. This calculator models the net pay method.
Salary sacrifice goes further: you formally give up part of your gross salary in exchange for an equal employer pension contribution, which cuts both Income Tax and National Insurance (employers often pass on part of their own NI saving too). It is usually the most tax-efficient route for higher earners, but it lowers your headline salary, which can affect mortgage affordability, life cover and statutory pay such as maternity pay.
Get Independent Financial Advice
The figure above is an estimate of what you're entitled to or what it costs you — deciding what to actually do with it (invest, overpay debt, top up a pension) is a bigger decision worth getting right.
- Received a redundancy payout: understand tax-free thresholds and how to make a lump sum work for you long-term.
- Planning parental leave: budget around the drop from full pay to statutory rate, and check what protections apply.
- Deciding whether to overpay a student loan: for many people investing the surplus outperforms early repayment — but it depends on your plan type and income trajectory.
- Reviewing pension contributions: small percentage changes compound significantly over a career.
An FCA-regulated independent financial adviser can model your specific numbers — free directories like Unbiased.co.uk match you with a local IFA.
Find an Independent Financial Adviser →Transparency & Methodology
Methodology & Sources
Figures are public HMRC/gov.scot/DWP rates. For your exact position, use gov.uk/estimate-income-tax.
Not Tax or Legal Advice
Information only. Consult the Chartered Institute of Taxation or an adviser via the FCA Register.
Open Source
Formulas are public. Inspect on GitHub.