Enter your company profit and the employer pension contribution you are considering. Example: on £80,000 of profit with a £12,570 salary, paying £10,000 into your pension saves £2,650 of corporation tax and reduces your take-home by only £4,722, because the money skips corporation tax, NI and dividend tax.
Updated for 2026/27. Uses UK corporation tax, dividend tax and PAYE assumptions. Estimates only — not tax advice.
Calculate company tax Read the guidesSee what an employer pension contribution from your limited company really costs in 2026/27. On £80,000 profit, a £10,000 contribution saves £2,650 corporation tax and costs you £4,722 of take-home.
Updated for 2026/27. Written and reviewed by James Whitfield against current GOV.UK and HMRC guidance · Editorial standards · Methodology. Estimates for planning only — not tax, accounting or financial advice.
Figures reviewed for the 2026/27 tax year (last updated July 2026). Source: GOV.UK.
An employer pension contribution is money your company pays straight into your pension. For 2026/27 it is a deductible business expense, so it comes off profit before corporation tax, and it carries no employer or employee National Insurance and no dividend tax. Taking the same money as dividends would mean corporation tax first and then dividend tax on what is left.
Use the Company pension box in the calculator to model a contribution. The result shows how the corporation tax bill, the dividends available and your personal take-home change, so you can see the real cost to you of each £1 that goes into the pension. The saving is largest when profit sits in the marginal relief band between £50,000 and £250,000, where each extra £1 of deduction saves about 26.5p of corporation tax.
Employer contributions count towards your £60,000 annual allowance, together with anything you pay in personally. Unlike personal contributions they are not capped at your salary, so a director on a £12,570 salary can still receive a large company contribution, provided it is reasonable for the work you do. Unused allowance from the previous three tax years can be carried forward if you were a member of a registered pension scheme in those years.
A director on a £12,570 salary in a company making £80,000, drawing everything else as dividends. Compare no pension with a £10,000 employer contribution (2026/27, England):
Here £10,000 lands in the pension for a £4,722 drop in take-home, because the contribution avoids 26.5% marginal corporation tax and the 35.75% dividend tax that the top slice of dividends would have paid. Pension money is taxed later on withdrawal (usually 25% tax-free, the rest as income), so the saving depends on your tax rate in retirement.
The rates and rules on this page are drawn from the official UK government sources below, using the confirmed 2026/27 figures. Each link opens the relevant HMRC, GOV.UK or Companies House page in a new tab.
A limited company must keep its finances separate from personal accounts. These accounts are free to open.
Companies House now charges £100 to register a limited company online (up from £50 in February 2026). Same-day digital registration is £156. You can register directly at gov.uk or through a formation agent.