Employees & PAYE
Salary sacrifice calculator
Paying into a pension by salary sacrifice is the most tax-efficient money in the UK system: the amount comes off your gross pay before Income Tax and National Insurance, so a £1 in your pension costs your take-home far less than £1. Put in your salary and what you'd sacrifice to see the real cost, the tax and NI you save, and what actually lands in your bank. Worked in your browser; nothing is sent anywhere.
Your salary & sacrifice
Rough figures are fine. This assumes a single job on the standard tax code (1257L-style Personal Allowance), England, Wales or Northern Ireland, and a pension set up as salary sacrifice.
Why salary sacrifice beats a normal pension contribution
A pension you pay from your take-home only gets Income Tax relief. Salary sacrifice gets you the tax relief and the National Insurance, because the money never counts as pay in the first place. For 2026/27 that changes the effective relief depending on your salary band:
- Basic-rate (up to £50,270). You save 20% Income Tax and 8% employee NI — so a £1,000 sacrifice costs your take-home about £720.
- Higher-rate (£50,270–£100,000). You save 40% Income Tax and 2% NI — a £1,000 sacrifice costs about £580, and it can pull you back under the higher-rate threshold entirely.
- The £100,000 trap. Between £100,000 and £125,140 your Personal Allowance is withdrawn, creating a 60% effective tax rate. Sacrificing enough to bring your pay down to £100,000 turns that into roughly 62% relief — the single most valuable pension money there is.
Two things to check first
Salary sacrifice can't take your cash pay below the National Minimum Wage, and it slightly lowers the earnings your Statutory Maternity Pay, mortgage affordability and State Pension record are based on. It's the pension mechanism this calculator assumes — confirm your workplace scheme actually uses it before relying on the NI saving.
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Common questions
How much does salary sacrifice actually save me?
It depends on your salary band. A basic-rate taxpayer saves 20% Income Tax plus 8% National Insurance, so a £1,000 pension sacrifice costs about £720 of take-home. A higher-rate taxpayer saves 40% plus 2%, so it costs about £580. Between £100,000 and £125,140 the saving reaches roughly 62% because sacrificing also restores your Personal Allowance. Enter your own figures above for the exact numbers.
What's the difference between salary sacrifice and a normal pension contribution?
A normal (relief-at-source or net-pay) pension contribution comes out of pay that has already had National Insurance charged on it, so you only get Income Tax relief. With salary sacrifice your employer reduces your gross salary and pays the amount into your pension, so it's never subject to Income Tax or NI at all — you get both. That's why the take-home cost is lower for the same amount going into your pot.
Does salary sacrifice reduce my National Insurance?
Yes. Because the sacrificed amount is taken off your gross pay before National Insurance is worked out, you pay 8% (or 2% above £50,270) less NI on that slice. Employers also save their 15% employer NI on it, and some schemes add that saving to your pension too — this calculator shows only your own take-home saving, so any employer top-up is a bonus on top.
Can salary sacrifice get me out of the 60% tax trap or the Child Benefit charge?
Often, yes. Both the £100,000 Personal Allowance taper (a 60% effective rate) and the High Income Child Benefit Charge are based on your adjusted net income, which salary sacrifice reduces pound for pound. Sacrificing enough to bring your pay down to £100,000 (or £60,000 for Child Benefit) can be worth far more than the headline rate.
Is there a limit on how much I can sacrifice?
Two limits apply. Salary sacrifice can't reduce your cash pay below the National Minimum Wage. And total pension contributions above the £60,000 annual allowance for 2026/27 (including your employer's) can trigger a tax charge. Within those, you can usually sacrifice as much as your employer's scheme allows.
Are these figures right for Scotland?
National Insurance and student loan repayments are the same across the UK, but Scottish taxpayers pay Income Tax on different bands and rates, so the Income Tax saving here won't match. This calculator uses the England, Wales and Northern Ireland bands for 2026/27.
Salary plus something on the side?
Salary sacrifice is the easy win when a wage is your only income. The moment you add untaxed income — a freelance side hustle, a rental, or dividends — HMRC wants a Self Assessment return, and pension contributions interact with the whole picture. The paid Self Assessment Tax Estimator stacks your wage, your self-employment profit and your other income together, applies your pension relief in the right place and works out the whole bill, the Class 4 National Insurance and the monthly amount to set aside.
- Self Assessment Tax Estimator 2026/27 — your complete bill, salary plus self-employment plus other income, with pension relief, the set-aside and payment-on-account dates worked out for you.
- Freelance Day-Rate & Profit Calculator — work backwards from the take-home you need.
- Rental Property ROI & Yield Calculator — for anyone with a buy-to-let alongside the day job.
- Invoice Tracker & Log — paid, outstanding and overdue, automatically.
Excel and Google Sheets. Working formulas, not just formatting. Built and checked by us, with AI assistance, and every calculation verified.
Get the Tax Estimator — £9 →£9 on its own, or all four tools for £19, with a 14-day money-back guarantee.