Both give the same tax relief to a basic rate taxpayer, but they take it at different points, so your payslip and your claim differ.
The two methods reach the same place for most people, by different routes. Under net pay the contribution comes out before tax is worked out, so relief is immediate. Under relief at source it comes out after tax and the scheme reclaims 20% from HMRC on your behalf. The difference shows up in what your payslip says, and in whether a higher rate taxpayer has to claim anything back.
On £35,000 a year with a standard 2026/27 tax code, no pension, no student loan, the figures work out like this. Open a calculator to put your own numbers in.
| Tax/source year | 2026/27 |
|---|---|
| Region | England/Wales/Northern Ireland |
| Tax code basis | 1257L where the page uses PAYE defaults |
| Pension basis | No pension deduction unless this example says otherwise |
| Student loan basis | No student loan unless selected in this example |
| Calculator setting | The answer is more useful when matched to the same tax year, region, tax code, pension and loan settings used in the calculator. |
|---|---|
| Records to compare | Payslips, HMRC records, student-loan notices and pension scheme documents can explain differences. |
| Tax code | HMRC tax-code changes, K codes, BR/D codes, or emergency markers can change PAYE deductions. |
|---|---|
| Cumulative basis | Week 1, Month 1 or non-cumulative payroll can differ from a smooth annual calculator estimate. |
| Pension method | Relief at source, net pay and salary sacrifice can affect taxable pay and take-home pay differently. |
| Payroll timing | Bonus, overtime, arrears, refunds, cut-off dates and corrections can all move a single payslip. |
| Open the salary calculator with editable assumptions | calculator next step |
|---|---|
| Review calculation sources and methodology | source context |
| What is not decided here | PayBreakdown does not decide payroll correctness, lender approval, benefit entitlement or employer compliance, and does not give regulated financial, mortgage, debt, tax, payroll or legal advice. |
|---|
The figures on this page are worked from relief at source vs net pay, using the values below. Open the calculator if your example salary differs.
The mechanics differ in when the relief arrives, which is what makes the payslip look different.
For a basic rate taxpayer the end result is the same. Two groups are affected differently.
The payslip usually gives it away, and it is worth checking if you are a higher rate taxpayer.
This is educational guidance on how UK pay and tax work. It does not decide payroll correctness, HMRC treatment, lender approval, benefit entitlement or employment rights, and it is not regulated financial advice. Where a figure matters, check it against your payslip, your HMRC account, or the official guidance linked above.
For a basic rate taxpayer they end up the same. Net pay is simpler for higher rate taxpayers because full relief is automatic. Relief at source is better for anyone earning below the £12,570 Personal Allowance, who gets a 20% top-up they would not otherwise receive.
Only under relief at source. The scheme reclaims 20% automatically and you claim the remaining 20% or 25% yourself through a tax return or by contacting HMRC. Under net pay it is already included.
Compare gross pay with taxable pay on your payslip. If taxable pay is lower by the contribution amount, it is net pay. If they match and the contribution is taken afterwards, it is relief at source.
No. Both save income tax only. Salary sacrifice is the arrangement that also reduces National Insurance, because it reduces gross salary before either is calculated.
Last updated 2026-08-27. Checked by Sean Elsmore. Rates last checked against GOV.UK on 2026-08-07. Estimates are for planning and should be checked against official records where the decision matters.