£26,000 salary with 5% pension after tax
On a £26,000 salary with a 5% pension contribution, you pay £1,300 into your pension and take home £21,200 a year, or £1,767 a month. Your take-home pay falls by £1,040 compared with no pension, because the contribution cuts your Income Tax from £2,686 to £2,426.
| Gross salary | £26,000 |
| Income Tax | £2,426 |
| National Insurance | £1,074 |
| Pension contribution | £1,300 |
| Take-home pay per year | £21,200 |
| Take-home pay per month | £1,767 |
| Take-home with no pension | £22,240 |
| Real cost of the contribution | £1,040 |
How this is worked out
The 5% contribution is worked out on the whole salary and taken from pay before Income Tax, as in schemes where, in GOV.UK's words, your employer takes workplace pension contributions out of your pay before deducting Income Tax. National Insurance is charged on the full salary, before the contribution.
If your scheme uses relief at source instead, the provider claims 20% tax relief and adds it to your pot, so your payslip looks different. Many automatic enrolment schemes work out contributions only on earnings between £6,240 and £50,270, which gives a smaller contribution than the one shown here. Employer contributions are not included.
Figures use the 2026-27 rates for England: tax code 1257L with the £12,570 Personal Allowance, no other income and no student loan. Income Tax at 20% up to £50,270, 40% up to £125,140 and 45% above. The Personal Allowance falls by £1 for every £2 of income over £100,000. Employee Class 1 National Insurance is 8% on pay between £12,570 and £50,270 a year and 2% above.
Sources: Income Tax rates and allowances (GOV.UK), National Insurance: how much you pay (GOV.UK), Tax relief on private pension contributions (GOV.UK), Workplace pensions: what you and your employer pay (GOV.UK)