Relief at source is a means of getting tax relief for the contributions that you made to 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.
To learn more about pension schemes, visit our helpful Pensions page, where we outline the three main pension routes.
The amount that you pay into your pension depends on your qualifying earnings before the deduction of Income Tax and National Insurance. Your employment contract will detail your specific contributions, so check with your employer for your pension information.
As an eligible employee, you do have the right to opt-out of auto-enrolment and you would contact your employer to discuss this. This must then be re-visited every three years and you can choose to opt-in at any time.