Pension Annual Allowance Taper Calculator UK
Work out your tapered annual allowance as a high earner — and the test most people miss: the taper only bites if you fail two income checks, not one.
The pension annual allowance — how much you can pay into a pension each year with tax relief — is normally £60,000, but for high earners it’s tapered down to as little as £10,000. The crucial point most people miss is that the taper only applies if you fail two separate income tests: your threshold income must exceed £200,000 AND your adjusted income must exceed £260,000. Clear either test and you keep the full £60,000. Above both, your allowance falls by £1 for every £2 of adjusted income over £260,000, hitting the £10,000 floor at £360,000. The trap is that adjusted income includes your employer’s pension contributions, so a generous employer can push you into the taper even when your salary alone is under £260,000 — while a personal pension contribution can lower your threshold income below £200,000 and switch the taper off entirely. This calculator shows your real allowance and how the two tests interact. To lower your taxable income, see the Salary Sacrifice Calculator; for contributions overall, the Pension Contribution Calculator.
Income and contribution
Employer contribution
Tax position
Allowance and projection
Pension contribution result
Total annual pension contribution
Calculating…
Calculating…
Your net cost
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Tax relief / saving
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Employer contribution
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Take-home impact
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Annual allowance headroom
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Projected pension pot
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Tapered allowance — quick lookup
The left table shows how your annual allowance falls as adjusted income rises through the £260,000–£360,000 taper zone. The right lists the two thresholds and the figures that drive the calculation. The headline is the floor: however high your income, the allowance never drops below £10,000 — reached once adjusted income hits £360,000.
| Adjusted income | Allowance |
|---|---|
| £260,000 | £60,000 |
| £280,000 | £50,000 |
| £300,000 | £40,000 |
| £320,000 | £30,000 |
| £340,000 | £20,000 |
| £360,000+ | £10,000 |
| Item | Figure |
|---|---|
| Standard allowance | £60,000 |
| Threshold income test | £200,000 |
| Adjusted income test | £260,000 |
| Taper rate | £1 per £2 |
| Minimum allowance | £10,000 |
The allowance table assumes the taper applies — that is, threshold income is also over £200,000. If threshold income is £200,000 or below, the taper is switched off and you keep the full £60,000 regardless of adjusted income. Above both tests, the allowance reduces by £1 for every £2 of adjusted income over £260,000, reaching the £10,000 minimum at £360,000. Any contribution above your allowance triggers a tax charge that recovers the relief.
How the taper works
The tapered annual allowance has a reputation for being baffling, and the reason is that it relies on two income figures most people have never calculated — and you need both. Once you see what they are and how they interact, the logic is clear.
Two tests, and you must fail both
The taper only applies if both of these are true: your threshold income exceeds £200,000, and your adjusted income exceeds £260,000. If either one is at or below its limit, the taper is switched off and you keep the full £60,000 allowance. This “both, not either” rule is the single most important thing to understand — and the thing most explanations gloss over. It means the threshold income test acts as a gateway: stay under £200,000 there, and the adjusted income figure never matters.
What threshold and adjusted income actually mean
Threshold income is broadly your taxable income after deducting your own pension contributions. Adjusted income is broadly all your income plus your employer’s pension contributions added back in. The difference matters enormously: your own contributions reduce threshold income (and can switch the taper off), while your employer’s contributions increase adjusted income (and can switch it on). Two figures, pulling in opposite directions.
The reduction and the charge
Once both tests are failed, your allowance drops by £1 for every £2 of adjusted income above £260,000. So at £300,000 adjusted income — £40,000 over — the allowance falls by £20,000 to £40,000. The reduction stops at the £10,000 minimum, reached when adjusted income hits £360,000. If your total pension input for the year exceeds your tapered allowance, the excess is subject to an annual allowance charge at your marginal rate, which claws back the tax relief on the over-contribution.
Worked examples
Four scenarios: the partial taper, the threshold-income escape, the employer-contribution trap, and a carry-forward rescue.
Scenario 1 · Both tests failed
£270,000 adjusted income → £55,000 allowance
Adjusted income £270,000 (over £260k) ✓
Reduction: (£270,000 − £260,000) ÷ 2 = £5,000
Allowance: £60,000 − £5,000 = £55,000
Here both tests are failed, so the taper applies. Adjusted income is £10,000 over the £260,000 line, which reduces the allowance by half that — £5,000 — leaving £55,000. It’s a modest cut at this level, but it climbs steeply: every extra £2 of adjusted income costs another £1 of allowance. Knowing exactly where you sit on the taper matters before you decide how much to contribute, since over-contributing brings a charge.
Scenario 2 · The threshold-income escape
£300,000 adjusted, but full £60,000 kept
Threshold income £195,000 (UNDER £200k) ✗
Taper switched off → allowance £60,000
This is the rule that surprises people. Even with adjusted income of £300,000 — well into the taper zone — the taper doesn’t apply because threshold income is below £200,000. Because the test needs both figures over their limits, failing just one switches the taper off. This is exactly why a personal pension contribution, which reduces threshold income, can be so powerful: drop below £200,000 there and the full £60,000 allowance is restored.
Scenario 3 · The employer-contribution trap
Salary under £260,000, taper still bites
Adjusted income = £270,000 (over £260k) ✓
Threshold income £230,000 (over £200k) ✓
Allowance: £55,000
A salary of £230,000 is comfortably under the £260,000 adjusted-income test — but adjusted income adds back the employer’s £40,000 pension contribution, taking it to £270,000 and triggering the taper. Many high earners with generous employer schemes are caught here without realising, because they only look at salary. If your employer contributes heavily, check your adjusted income carefully; the contribution that’s building your pension may also be shrinking your allowance.
Scenario 4 · Carry-forward rescue
Using three years of unused allowance
Unused allowance carried from 3 prior years: £45,000
Total available to contribute: £75,000
The taper limits this year’s allowance, but it doesn’t erase unused allowance from the past. If you were a pension scheme member in the previous three tax years and didn’t use your full allowance, you can carry it forward. Someone tapered to £30,000 this year but with £45,000 unused from earlier years can contribute up to £75,000 without a charge. For high earners with lumpy income — a big bonus year, say — carry forward is often the difference between a large contribution and a tax charge.
How to manage the taper — four levers
Most explanations stop at “your allowance is reduced”. But because the taper hinges on two figures you can sometimes influence, there’s real planning to be done. Work through these four before deciding what to contribute:
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1
Is your threshold income actually over £200,000?
This is your escape route. Because the taper needs both tests failed, getting threshold income to £200,000 or below switches it off entirely — regardless of adjusted income. A personal pension contribution reduces threshold income, so it can be the move that restores your full £60,000 allowance.
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2
Are employer contributions pushing up adjusted income?
Adjusted income adds back your employer’s pension contributions, so a generous employer scheme can trigger the taper even when your salary is under £260,000. Check the real adjusted figure, not just your pay — the contribution growing your pension may be quietly shrinking your allowance.
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3
Do you have carry forward to use?
The taper caps this year’s allowance, but unused allowance from the previous three years can be carried forward if you were a scheme member. For a big-bonus or lumpy-income year, this is often what lets a tapered earner make a large contribution without a charge.
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4
Would over-contributing trigger a charge?
Paying in more than your tapered allowance (plus any carry forward) brings an annual allowance charge at your marginal rate, recovering the relief. Work out your real allowance first; for tapered high earners, contributing blind is how an intended tax saving turns into a tax bill.
Same £300,000 income — different allowance
How threshold income changes the outcome:
The same headline income can leave you with a £40,000 allowance or a full £60,000, depending only on whether your threshold income clears £200,000 — and carry forward can lift the total higher still. That’s why the taper rewards planning rather than guesswork. For most high earners the key checks are simple: work out both income figures properly, watch for employer contributions inflating adjusted income, use a personal contribution to drop threshold income below £200,000 where it helps, and lean on carry forward in big years. Getting the allowance right before contributing is what avoids an unexpected charge. The calculator does both tests for you and shows your real allowance.
A note on reporting the charge
If you exceed your allowance, it’s your responsibility to report the annual allowance charge to HMRC, normally through Self Assessment — your scheme won’t do it automatically. In some cases you can ask the scheme to pay the charge from your pension (known as “scheme pays”), which avoids finding the cash separately but reduces your pot. The figures are genuinely complex, especially with defined benefit pensions where the “input” isn’t a simple contribution amount, so tapered high earners often benefit from advice before the year-end.
Two scenarios that change the picture
What if…
A personal contribution drops you under £200k?
What if…
Your employer pays a big pension contribution?
Key tapered allowance terms explained
The taper relies on a handful of precise definitions that look similar but behave very differently. The ten terms below cover what you’ll meet working out your real allowance.
- Annual allowance
- The amount you can pay into pensions each year with tax relief, normally £60,000. Contributions above it trigger a tax charge that recovers the relief on the excess.
- Tapered annual allowance
- The reduced allowance for high earners, falling by £1 for every £2 of adjusted income over £260,000, down to a £10,000 minimum. Applies only when both income tests are failed.
- Threshold income
- Broadly your taxable income after deducting your own pension contributions. The taper switches off entirely if this is £200,000 or less, whatever your adjusted income.
- Adjusted income
- Broadly all your income with employer pension contributions added back in. This is the figure the £260,000 test uses, and the one a generous employer scheme can inflate.
- The two-test rule
- The taper applies only if threshold income exceeds £200,000 AND adjusted income exceeds £260,000. Clearing either test keeps the full £60,000 allowance — the single most important point.
- Pension input amount
- The total going into your pensions in a year — your contributions, your employer’s, and tax relief. For defined benefit schemes it’s a calculated figure, not a simple cash amount.
- Carry forward
- The ability to use unused allowance from the previous three tax years, if you were a pension scheme member then. It can lift a tapered earner’s contribution well above this year’s limit.
- Annual allowance charge
- The tax charge on contributions above your allowance, at your marginal rate, which recovers the relief on the excess. You must report it to HMRC, usually via Self Assessment.
- Scheme pays
- An option to have your pension scheme pay the annual allowance charge from your pot, rather than finding the cash yourself. It avoids a bill now but reduces your eventual pension.
- Minimum tapered allowance
- The £10,000 floor the taper can’t go below, reached once adjusted income hits £360,000. Above that income, the allowance stays at £10,000 however much more you earn.
Five mistakes high earners make with the taper
The taper catches people because the definitions are subtle and the numbers are large. These five errors, drawn from the recurring r/UKPersonalFinance and r/FIREUK threads, are the costly ones.
Forgetting employer contributions count
Many check only their salary against £260,000 and assume they’re safe. But adjusted income adds back employer pension contributions, so a generous scheme can trigger the taper even on a salary well under the threshold. Always work out the full adjusted figure, not just pay.
Cost: an unexpected charge Fix: include employer contributions in adjusted incomeThinking one test is enough
People panic when adjusted income tops £260,000, not realising the taper also needs threshold income over £200,000. If threshold income is below £200,000, the taper is off and the full £60,000 stands — regardless of how high adjusted income is.
Cost: contributing too little needlessly Fix: check both tests, not just oneOver-contributing without checking the allowance
Setting contributions at £60,000 on autopilot, when the real tapered allowance is £30,000 or less, brings an annual allowance charge at your marginal rate. For a tapered earner, contributing blind turns an intended tax saving into a tax bill. Work out the allowance first.
Cost: a charge clawing back the relief Fix: calculate your tapered allowance before payingIgnoring carry forward in a big year
A bonus or lumpy-income year can dwarf the tapered allowance — but unused allowance from the previous three years can often absorb it. People miss this and either contribute too little or face a charge they could have avoided by carrying forward.
Cost: a missed contribution or a charge Fix: check three years of unused allowanceAssuming the scheme reports the charge
If you exceed your allowance, it’s your responsibility to report the charge to HMRC — your pension provider won’t do it automatically. People assume it’s handled for them, then face penalties for not declaring. Report it via Self Assessment, or arrange “scheme pays”.
Cost: penalties for failing to declare Fix: report the charge yourselfFrequently asked questions
What is the tapered annual allowance?
It’s the reduced pension annual allowance for high earners. The normal allowance is £60,000, but it tapers down to as little as £10,000 once your income passes certain limits, reducing how much you can pay into a pension with tax relief.
The reduction is £1 of allowance for every £2 of adjusted income over £260,000, but it only applies if you also fail the threshold income test of £200,000. It’s a way of limiting pension tax relief for the highest earners.
When does the pension taper apply?
Only when both tests are failed: your threshold income exceeds £200,000 and your adjusted income exceeds £260,000. If either is at or below its limit, the taper doesn’t apply and you keep the full £60,000 allowance.
This “both, not either” rule is the most important — and most misunderstood — part. The threshold income test acts as a gateway: if you stay under £200,000 there, your adjusted income never matters, however high it is.
What’s the difference between threshold and adjusted income?
Threshold income is broadly your taxable income after deducting your own pension contributions. Adjusted income is broadly all your income with your employer’s pension contributions added back in.
The difference matters because they pull in opposite directions: your own contributions lower threshold income (and can switch the taper off), while your employer’s contributions raise adjusted income (and can switch it on). You need to work out both to know your real allowance.
How much is my tapered allowance?
If the taper applies, your allowance is £60,000 minus £1 for every £2 of adjusted income over £260,000, down to a £10,000 minimum. So £280,000 gives £50,000, £300,000 gives £40,000, £320,000 gives £30,000, and £360,000 or more gives the £10,000 floor.
Remember this only applies if your threshold income also exceeds £200,000. The calculator runs both tests and shows the exact allowance for your figures.
Do employer contributions count toward the taper?
Yes — and this catches people out. Adjusted income adds back your employer’s pension contributions, so a generous employer scheme can push you over the £260,000 line even when your salary is below it.
For example, a £230,000 salary with a £40,000 employer contribution gives £270,000 of adjusted income, triggering the taper. If your employer contributes heavily, check your adjusted income carefully — the contribution growing your pension may also be shrinking your allowance.
Can I avoid the taper by paying into a pension?
Sometimes, yes. A personal pension contribution reduces your threshold income, and if it brings you to £200,000 or below, the taper switches off entirely — restoring the full £60,000 allowance regardless of adjusted income.
This works because the taper needs both tests failed. For someone just over the £200,000 threshold, a relatively modest personal contribution can unlock a much larger allowance. The maths is worth checking carefully, ideally with an adviser, before relying on it.
What is carry forward and can I still use it?
Carry forward lets you use unused annual allowance from the previous three tax years, provided you were a pension scheme member in those years. It’s available even if you’re tapered this year.
So someone tapered to £30,000 this year, but with £45,000 unused from earlier years, could contribute up to £75,000 without a charge. For high earners with lumpy income — a big bonus year — carry forward is often the difference between a large contribution and a tax charge.
What happens if I exceed my allowance?
The excess is subject to an annual allowance charge at your marginal rate, which recovers the tax relief on the over-contribution. It’s your responsibility to report it to HMRC, normally through Self Assessment — your scheme won’t do it automatically.
In some cases you can ask the scheme to pay the charge from your pension (“scheme pays”), avoiding the need to find the cash but reducing your pot. With defined benefit pensions the figures get complex, so advice is often worth it. See gov.uk.
Related calculators
The taper connects to the contributions that trigger or avoid it, your wider pay, and the other high-earner tax traps. These calculators handle each piece.
Methodology & sources
How the maths works
The calculator runs the two income tests that decide whether the taper applies. It takes your threshold income — broadly taxable income after your own pension contributions — and your adjusted income — broadly all income with employer pension contributions added back. The taper applies only if threshold income exceeds £200,000 and adjusted income exceeds £260,000; if either is at or below its limit, the full £60,000 allowance stands. Where both are exceeded, the allowance is reduced by £1 for every £2 of adjusted income above £260,000, down to a £10,000 minimum reached at £360,000 of adjusted income. The calculator then compares your total pension input for the year against this allowance (plus any carry forward) to show whether an annual allowance charge would arise on the excess.
These are illustrative estimates to show how the taper behaves, not a personal tax computation. Real outcomes depend on the precise definitions of threshold and adjusted income, your full income from all sources, the value of defined benefit pension inputs (which are calculated, not simple contributions), your carry-forward position, and the current thresholds, all of which can change. The taper interacts with other rules, such as the money purchase annual allowance for those who have drawn pension flexibly. The aim is to show how the two tests work and what your allowance is — not to replace advice from an FCA-regulated financial adviser, which tapered high earners often need.
Assumptions and conventions used
- Standard annual allowance: £60,000
- Threshold income test: £200,000
- Adjusted income test: £260,000
- Both tests must be failed for the taper to apply
- Reduction: £1 of allowance per £2 of adjusted income over £260,000
- Minimum allowance: £10,000, reached at £360,000 adjusted income
- Threshold income is after your own contributions
- Adjusted income adds back employer contributions
- Carry forward: unused allowance from the prior 3 years · figures illustrative current UK figures