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Pensions & RetirementPension2026/27 Tax Year

Workplace Pension Calculator

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Disclaimer: Illustrative projection based on the figures and assumptions entered. Pension pot growth is not guaranteed, investment values can fall as well as rise, and statutory retirement rules or tax relief rates may change. For personal retirement planning, consult an FCA-regulated financial adviser or contact Pension Wise.

What auto-enrolment actually pays in

The 8% minimum is charged on qualifying earnings, not on your whole salary. That band starts at £6,240, so the real contribution is meaningfully lower than 8% of pay.

Figures stated for the 2026/27 UK tax year. Content last checked against official sources on .

What this calculator does

  • Works out employer and employee contributions on the auto-enrolment qualifying earnings basis.
  • Shows the qualifying earnings figure explicitly, which is where most confusion starts.
  • Projects the resulting pot forward to retirement.

How the calculation works

Automatic enrolment sets a minimum total contribution of 8% of qualifying earnings, made up of at least 3% from the employer and 5% from the employee. The critical detail is the base. Qualifying earnings are not your whole salary: they are the slice between £6,240 and £50,270 a year. So someone on £35,000 has qualifying earnings of £28,760, not £35,000, and the 8% is charged on the smaller figure. That gap is why real contributions routinely come in below what people expect from the headline percentage — and it also means the effective rate as a share of total pay rises as salary approaches the upper limit and then falls away above it. Many employers use a more generous basis, contributing on full pay rather than the qualifying band, so it is worth checking which basis your scheme uses before assuming the minimum.

The rule

Qualifying earnings = the part of annual pay between £6,240 and £50,270. Contribution = qualifying earnings × the contribution rate.

Step by step

  1. Take annual pensionable salary.
  2. Deduct the £6,240 lower limit, capping at the £50,270 upper limit, to give qualifying earnings.
  3. Apply the employer rate to give the employer contribution.
  4. Apply the employee rate to give the employee contribution.
  5. Compound the combined contributions and any existing pot forward to retirement.

Worked example

Someone earning £35,000 on the auto-enrolment minimum of 3% employer and 5% employee, starting from nothing, twenty-five years from retirement at 5% growth.

What was entered

Inputs used in the worked example
Annual pensionable salary£35,000
Employer contribution rate3%
Employee contribution rate5%
Current pot balance£0
Expected annual growth rate5%
Years until retirement25

The arithmetic

  1. Qualifying earnings are £35,000 − £6,240 = £28,760, not the full salary.
  2. The employer's 3% is £862.80 a year.
  3. The employee's 5% is £1,438 a year.
  4. Combined, £2,300.80 goes in annually — which is 6.6% of the £35,000 salary, not 8%.
  5. Compounded at 5% over twenty-five years that produces a pot of about £112,305.

What the calculator returns

Results produced by the worked example
Qualifying earnings£28,760.00
Employer contribution a year£862.80
Your contribution a year£1,438.00
Projected pot£112,304.83

Key assumptions

  • The scheme uses the qualifying earnings basis, which is the statutory minimum.
  • Salary stays flat in nominal terms for the whole period.
  • Growth is steady at the rate entered, with no charges deducted separately.

Limitations

  • Many employers contribute on full pay rather than qualifying earnings, or match above the minimum. Check your scheme, because the difference over a career is large.
  • Salary is held flat, which understates a real career where pay rises and contributions rise with it.
  • Charges are not deducted in this projection, so the pot is optimistic relative to a real scheme.
  • The employee's 5% attracts tax relief, so the cost to take-home pay is lower than the cash figure shown.
  • Defined benefit schemes work on an entirely different basis and are not modelled.

Common questions

Why is 8% not 8% of my salary?
Because the statutory minimum is charged on qualifying earnings — the slice between £6,240 and £50,270 — rather than on total pay. On a £35,000 salary that reduces the effective rate to about 6.6% of what you actually earn.
Should I opt out to increase my take-home pay?
Opting out forfeits the employer contribution and the tax relief, which together are usually worth considerably more than the increase in take-home pay. It is one of the few decisions where the arithmetic is fairly one-sided.
Does my employer have to use the qualifying earnings basis?
No — that is the minimum. Many schemes contribute on full basic pay or on total earnings, which produces a bigger pension for the same headline percentage. Your scheme documents will say which basis applies.
What if I earn less than £6,240?
There are no qualifying earnings, so the statutory minimum produces nothing. Automatic enrolment itself is triggered at a higher earnings level, though you can usually ask to join a scheme voluntarily.

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Official sources

Every figure in this guide was checked against the sources below. Where a source could not confirm a figure, it is marked as requiring verification rather than presented as settled.