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Death in service calculator: what would your family get?
The death in service calculator multiplies the salary your scheme uses by your scheme's multiple.
Death in service gives a family a tax-free cash sum if an employee passes away while on the company payroll (Legal & General ↗), usually as a multiple of salary (Legal & General ↗).
Enter your figures, then see whether the lump sum sits inside the tax-free allowance.
Every claim here is our summary of a named external source, linked beside it. Sources change: check the wording at the link before you rely on it.
How to calculate your death in service benefit
The sum is simple: salary times multiple.
Legal & General says most UK employers offer between 2 and 4 times salary (Legal & General ↗).
The starting figure, £38,220, is the average UK earnings figure Legal & General uses in its own example (Legal & General ↗).
Replace it with yours.
Then pick how the scheme is set up.
Most group life policies run as a registered occupational pension scheme (GRiD ↗); some employers use an excepted policy instead.
The two are taxed differently.
Nothing you type is stored or sent.
The result is arithmetic, not a quote: your scheme rules decide what is paid.
Your scheme's multiple of salary
How is the scheme set up?
£114,660 is £958,440 under the standard allowance of £1,073,100.
- Above the allowance, HMRC says the excess is taxed at the recipient's marginal rate (HMRC PTM172000 ↗).
- The allowance is shared: Aviva says tax-free cash the member took from registered schemes in their lifetime counts towards it (Aviva ↗).
- MoneyHelper says no income tax is usually charged if the person was under 75 and it is paid within two years; at 75 or over, income tax is usually charged (MoneyHelper ↗).
- From 6 April 2027, death in service benefits from a registered pension scheme are excluded from the estate for inheritance tax (GOV.UK ↗).
Is your salary calculated correctly?
Schemes vary, from the level of cover to how the money is paid out (Royal London ↗).
So the salary in the sum is the one your scheme defines, not necessarily your payslip total.
Check whether it means basic pay, whether it includes bonus or overtime, and how it treats part-time hours.
The NHS Pension Scheme is a published example of how exact the definition is: the lump sum on death in service is 2 × “actual pay” in the 1995 Section and 2 × “reckonable pay” in the 2008 Section, and in the 2015 Scheme it is based on relevant or revalued pensionable earnings (NHSBSA ↗).
Find
Your scheme’s multiple
It is in your contract, offer letter or benefits booklet. HR can confirm it.
Check
What “salary” means
Basic pay only, or with bonus and overtime? Actual part-time pay, or full-time equivalent?
Confirm
Who you have nominated
Trustees take your wishes into account when they decide who is paid.
Trustees' discretion: Legal & General says the benefit is payable at the trustees' discretion and they take your chosen person into account (Legal & General ↗).
LSDBA: when large payouts may be taxed
The lifetime allowance ended on 6 April 2024 (HMRC PTM171000 ↗).
For a registered scheme, the test now is the lump sum and death benefit allowance (HMRC PTM172000 ↗), and the steps on the right show how it applies.
The age and inheritance tax rules are in the calculator's registered-scheme panel above.
Tax depends on the facts.
Check your own position with the scheme administrator or an adviser.
The allowance
£1,073,100 as standard
Unless the person had protection for a higher amount.
What counts
Certain lump sum death benefits
Those paid to beneficiaries from a registered scheme count towards it.
Above it
The excess is taxed
At the recipient’s marginal rate.
Sources: allowance and marginal rate (HMRC PTM172000 ↗); what counts (GOV.UK ↗); the under-75 rule (MoneyHelper ↗); the excepted policy age limit (legislation.gov.uk ↗).
Registered or excepted: why it matters
A registered scheme is an occupational pension scheme set up under discretionary trust and registered with HMRC (Aviva ↗).
An excepted group life policy is a relevant life policy that insures two or more people (Legal & General ↗), and its benefits do not count towards the lump sum and death benefit allowance (Legal & General ↗).
So a large lump sum from an excepted policy is not tested against the allowance.
Rows summarise HMRC, the legislation and two insurers' own guides (Aviva for its policies, Legal & General for its policies); terms differ between insurers, so check each at its link. HMRC says deaths within the first ten years of an excepted scheme's trust are likely to be taxed at 0% (HMRC ↗).
Is death in service enough on its own?
Legal & General says a multiple of your salary may or may not be enough to meet your protection needs, and that when an employee leaves an organisation they are no longer protected by its death in service benefit (Legal & General ↗).
Compare the figure above with what your family would need to cover.
Company directors have a separate route: relevant life cover, which the employer takes out and pays for, paying the family through a trust (Royal London ↗).
While employed
Covered by the scheme
A lump sum for your family, usually a multiple of salary, while you are on the payroll.
Change jobs
Cover ends with the job
A new employer may or may not offer death in service, on its own terms.
Administration
Cover can be lost
Royal London lists an employer going into administration as a way to lose it.
Sources: enough, and leaving (Legal & General ↗); administration (Royal London ↗); the multiple of salary (Legal & General ↗).
More on death in service, by question
The rest of the guide series, for employees and for employers.
- Start here
Death in service
What it is, how much it pays and how it is taxed.
Read the guide → - For employees
Death in service benefit
How much it pays, who gets it, the NHS scheme and benefit in kind.
Read the guide → - For families
Death in service payments
How the money is claimed, who decides, and probate.
Read the guide → - For employers
Death in service insurance
The policy behind the benefit, and the scheme types.
Read the guide → - For employers
Group life insurance
One policy for the workforce, compared with relevant life.
Read the guide → - For employers
Group life insurance cost
What drives the premium, and the examples a broker publishes.
Read the guide →
Check it for yourself
Every claim on this page is our summary of one of the documents listed here.
We last checked them against the live sources on 28 September 2026.
The documents are the authority, not this page.
Insurers and HMRC update them, so validate any figure or condition at its link before you rely on it.
- Legal & General: death in service v life insurance ↗Tax-free cash sum, trustees’ discretion, and the two-to-four-times range
- HMRC Pensions Tax Manual, PTM172000 ↗The lump sum and death benefit allowance, and the marginal-rate charge on the excess
- HMRC Pensions Tax Manual, PTM171000 ↗The end of the lifetime allowance from 6 April 2024
- GOV.UK: lump sum and death benefit allowance ↗The £1,073,100 allowance and income tax above it
- MoneyHelper: pensions help after someone’s death ↗Expression of wish forms, trustee discretion, the age-75 rule and probate
- GOV.UK: Inheritance Tax on unused pension funds and death benefits ↗Death in service benefits from registered schemes stay outside the estate from 6 April 2027
- Aviva: Group Life registered and excepted benefits technical guide (GR01299) ↗How Aviva’s registered and excepted group life policies differ: tax, trusts, cease ages
- Legal & General: relevant life and excepted group life policies ↗What an excepted group life policy is, the allowance and discretionary trust charges
- ITTOIA 2005, section 481 ↗Excepted group life policy conditions, including the age-75 limit
- HMRC Inheritance Tax Manual, IHTM17092 ↗Excepted group life trusts and the first ten years
- NHS Business Services Authority: benefits payable on death ↗The NHS Pension Scheme lump sum on death in service, and nominations
- Royal London: death in service benefit, is it enough? ↗Nominations, trustees’ final say, and when the benefit is lost
- GRiD: group life assurance ↗The industry body’s description, tax summary and 2023 market figures
- Royal London relevant life FAQs ↗Relevant life: single life cover the employer pays for
Death in service calculator, answered
Not financial advice. This page is general information. Before buying insurance, the FCA tells consumers to check the firm on its Firm Checker (FCA ↗). For free guidance, see MoneyHelper.