About the UK Salary Sacrifice Calculator
This UK salary sacrifice calculator shows what giving up part of your salary in exchange for an employer pension contribution (or another non-cash benefit) really costs you. It compares your income tax and employee National Insurance before and after the sacrifice, so you see how much of each pound sacrificed comes out of your take-home pay and how much is covered by tax and NI savings.
It is useful for employees deciding how much to put into a workplace pension, higher earners near the £100,000 personal-allowance taper (where sacrifice can save 60% or more), and employers explaining a scheme. It also shows the employer National Insurance saved, which some employers add to your pension.
Calculations use 2026/27 rates for England, Wales and Northern Ireland: personal allowance £12,570 (tapered above £100,000), 20%/40%/45% bands, employee NI at 8% between £12,570 and £50,270 and 2% above, and employer NI at 15% above £5,000. Scottish income tax bands differ. From April 2029 NI relief on pension salary sacrifice is due to be limited to the first £2,000 a year.
With the default inputs, the tax & ni saved (yearly) is £700.00. Change any value above to recalculate instantly.
How to use the uk salary sacrifice calculator
- 1Enter your annual gross salary.
- 2Choose whether to sacrifice a percentage or a fixed yearly amount and enter it.
- 3Tick the box if your employer adds its NI saving to your pension.
- 4Read the tax and NI saved and how much your take-home pay really falls.
- 5Try different amounts to find the most efficient level of sacrifice.
Formula and method
The calculator works out income tax and employee National Insurance on your full salary S and on the reduced salary S − X after sacrificing X, and the difference is your saving. Your take-home pay only falls by the sacrifice minus that saving, while the full amount X goes into your pension.
Tax uses 2026/27 rUK bands: a £12,570 personal allowance reduced by £1 for every £2 of income over £100,000, 20% on the next £37,700, 40% up to £125,140 and 45% above. Employee NI is 8% between £12,570 and £50,270 and 2% above. Employer NI is 15% above £5,000, and any of it passed on is added to the pension total.
- S
- Gross salary before sacrifice
- X
- Salary sacrificed per year
Worked examples
£50,000 salary, 5% sacrifice
Sacrificing £2,500 saves basic-rate tax of £500 and 8% NI of £200. Take-home pay falls by only £1,800 while £2,500 goes into the pension, and the employer saves £375 of NI.
£60,000 higher-rate taxpayer, 10% sacrifice
The whole £6,000 comes off income taxed at 40%, saving £2,400 of tax and £120 of NI at 2%. The pension receives £6,000 for a take-home cost of just £3,480.
£105,000 salary sacrificing £5,000
Reducing income from £105,000 to £100,000 restores £2,500 of personal allowance, so the tax saving is £3,000 (60%). With £100 of NI saved the cost is £1,900, and adding the employer’s £750 NI saving puts £5,750 into the pension.
Frequently asked questions
How does salary sacrifice save tax?+
You agree to a lower contractual salary and your employer pays the difference into your pension. Because your salary is lower, you pay less income tax and National Insurance, and your employer pays less NI too.
Is salary sacrifice better than relief at source?+
Usually yes for employees, because relief at source and net pay arrangements give income tax relief but not National Insurance relief. Salary sacrifice also saves 8% or 2% employee NI, and your employer may add its 15% NI saving.
Are there downsides to salary sacrifice?+
A lower salary can reduce the amount you can borrow for a mortgage, statutory payments such as maternity pay, and life cover linked to salary. Your salary after sacrifice must not fall below the National Minimum Wage.
What changes to salary sacrifice are planned?+
The government has announced that from April 2029 National Insurance relief on pension contributions made through salary sacrifice will be capped at £2,000 a year per employee. Income tax relief is not affected.
Can salary sacrifice help with the £100,000 tax trap?+
Yes. Between £100,000 and £125,140 the personal allowance is withdrawn, creating an effective 60% tax rate. Sacrificing salary to bring income to £100,000 restores the allowance and can also help you keep tax-free childcare eligibility.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.