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Relief at source

Relief at source is a way of getting tax relief for the contributions that you made into your pension scheme.

Your pension provider will do it automatically for you for the tax that you paid at the basic rate (20%). If you’re a higher rate or additional rate taxpayer, you will need to do a Self Assessment tax return for the rest (another 20% or 25%).

Relief at source is only available if you pay pension contributions from your after-tax salary. If your employer is using “net pay” or “salary sacrifice”, then you don’t get relief at source. However, your pension contributions already include any tax that you would have otherwise paid for that income, so the result is more or less the same.

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