Pension Calculator

From 6 April 2026, the minimum total contribution remains 8% of qualifying earnings, with at least 3% coming from the employer. The employee portion is 5%, which is reduced by tax relief at the basic rate. Qualifying earnings are calculated between the lower and upper limits set by HMRC for the 2026/27 tax year.

Directors can reduce their taxable dividend income by making personal pension contributions, which are taxed at 10.75% for basic rate, 35.75% for higher rate, and 39.35% for additional rate taxpayers. The dividend allowance remains at £500, so contributions above this threshold can effectively lower the overall tax bill. This is particularly beneficial for those earning above the higher rate threshold.

Yes, from 6 April 2026, self-employed individuals and landlords with gross income over £50,000 must comply with MTD ITSA requirements. This means they will need to keep digital records and submit quarterly updates to HMRC. The threshold is set to rise to £100,000 in April 2027, but the current 2026/27 rules apply strictly to the £50,000 mark.

Employers must pay 15% National Insurance on earnings above £5,000 per employee from April 2026. This rate applies to most employees and is a key factor when calculating total employment costs alongside pension contributions. Employers should ensure their payroll systems are updated to reflect this rate to avoid compliance issues with HMRC.

The VAT registration threshold remains at £90,000 for the 2026/27 tax year, meaning businesses below this turnover do not need to charge VAT on their services. While this does not directly change pension contribution rules, it affects the overall cash flow available for employer contributions. Businesses approaching this threshold should plan their pension contributions carefully to manage their VAT liability.