Teachers' Pension Contribution Rates for 2026/27
As a member of the Teachers' Pension Scheme (TPS), your pension contributions are deducted from your salary each month before income tax is calculated. The amount you pay depends on your annual salary, with higher earners paying a higher percentage. For 2026/27, there are six contribution tiers, ranging from 7.4% to 12.0%. Understanding which tier you fall into and how contributions are calculated is essential for planning your finances.
2026/27 Employee Contribution Tiers
| Annual Salary Range | Contribution Rate |
|---|---|
| Up to £36,198 | 7.4% |
| £36,198 to £48,727 | 8.9% |
| £48,728 to £57,776 | 9.9% |
| £57,777 to £76,572 | 10.5% |
| £76,573 to £104,413 | 11.6% |
| £104,414 and above | 12.0% |
Employer Contribution Rate
In addition to your employee contribution, your employer pays a contribution of 28.68% of your pensionable salary. This employer contribution is not deducted from your pay — it is paid on top of your salary by the school or local authority. For a teacher earning £35,000, the employer contributes approximately £10,038 per year to the pension scheme on your behalf. This makes the total contribution (employee plus employer) one of the highest of any pension arrangement in the UK.
Your Tier Is Based on Full-Time Equivalent Salary
How Contributions Are Calculated
Your contribution rate applies to your entire pensionable salary, not just the portion above or below the tier threshold. This means that if you are just above a tier boundary, your overall contribution rate jumps to the higher rate for your full salary. For example:
| Pay Point (Rest of England) | Salary | Tier | Annual Contribution | Monthly (approx.) |
|---|---|---|---|---|
| M1 | £34,069 | 7.4% | £2,521 | £210 |
| M3 | £38,400 | 8.9% | £3,418 | £285 |
| UPS1 | £49,134 | 9.9% | £4,864 | £405 |
| UPS3 | £52,835 | 9.9% | £5,231 | £436 |
UPS3 falls in the same 9.9% tier as UPS1 for 2026/27.
Tier Boundary Effects
Pensionable Salary Explained
Your pensionable salary includes your basic pay plus any additional payments that are pensionable. This typically includes:
- Your base salary on the MPR, UPR, or Leadership spine.
- TLR payments (TLR1, TLR2, and TLR3).
- SEN allowance.
- Recruitment and retention payments (if pensionable).
This means that additional payments can push you into a higher contribution tier. A teacher on M6 (£46,940) with a TLR2 of £5,000 would have a pensionable salary of £51,940, placing them in the 9.9% tier rather than the 8.9% tier they would be in on base salary alone.
Salary Sacrifice and Pension Contributions
Some schools offer salary sacrifice arrangements, where teachers agree to a lower contractual salary in exchange for the school making additional pension contributions or other benefits. This can reduce your National Insurance liability because NI is calculated on your reduced contractual salary, while your pension benefits are based on the higher notional salary.
However, salary sacrifice can affect your contribution tier. If your contractual salary falls below a tier boundary due to salary sacrifice, you may pay a lower percentage in pension contributions. The impact on your pension benefits depends on the specific salary sacrifice arrangement — in some cases, pension is calculated on the pre-sacrifice salary (known as "notional salary"), and in others, it is based on the reduced salary. Check with your school's HR department or Teachers' Pensions for clarification.
Monthly Deductions in Practice
To understand how pension contributions affect your monthly take-home pay, here are some worked examples for common salary points in the Rest of England:
| Pay Point | Annual Salary | Tier | Annual Contribution | Monthly Deduction |
|---|---|---|---|---|
| M1 | £34,069 | 7.4% | £2,521 | £210 |
| M4 | £40,941 | 8.9% | £3,644 | £304 |
| M6 | £46,940 | 8.9% | £4,178 | £348 |
| UPS1 | £49,134 | 9.9% | £4,864 | £405 |
| UPS3 | £52,835 | 9.9% | £5,231 | £436 |
See Your Full Breakdown
Tax Relief on Contributions
TPS contributions are deducted before income tax is calculated (known as "net pay" arrangement), which means you automatically receive full tax relief on your pension contributions. A basic-rate taxpayer effectively pays only 80p for every £1 of pension contribution, while a higher-rate taxpayer pays just 60p. This tax relief, combined with the generous employer contribution of 28.68%, makes the TPS exceptionally good value. For more on how this interacts with your tax position, see our income tax guide.
Reviewing Your Contributions
You can check your pension contributions and service history through the My Pension Online (MPO) portal run by Teachers' Pensions. It is worth logging in regularly to ensure your records are accurate, particularly if you change roles, move schools, or receive additional payments. Errors in your pension record can affect your contribution tier and your eventual retirement benefits, so catching them early is important.