Salary Sacrifice Calculator UK
See your estimated Income Tax and National Insurance savings from pension salary sacrifice, and your new take-home pay.
Based on published UK 2026/27 tax thresholds · Standard PAYE assumptions
Use this salary sacrifice calculator UK to estimate how much tax and National Insurance you could save by sacrificing part of your salary into a pension salary sacrifice scheme. Enter your gross salary and sacrifice amount below to see your savings and new net pay.
🏦 Your Salary Sacrifice Details
to see your estimated tax and NI savings
How Pension Salary Sacrifice Works
Salary sacrifice means agreeing to reduce your gross salary in exchange for your employer paying that amount directly into your pension. Because the sacrifice happens before tax and National Insurance are calculated, you pay less of both — and your pension grows by the full sacrificed amount.
Tax savings from salary sacrifice
If you are a basic rate taxpayer, sacrificing £100 of salary normally costs you only around £72 in lost take-home pay, because you save 20% Income Tax and 8% National Insurance. Higher rate taxpayers save even more — around 42% combined.
Salary sacrifice and the £100,000 Personal Allowance taper
If your salary is between £100,000 and £125,140, your Personal Allowance is gradually withdrawn, creating an effective 60% marginal tax rate. Salary sacrifice can reduce your taxable income below £100,000, restoring some or all of your Personal Allowance and significantly cutting your effective tax rate.
Things to consider before salary sacrifice
Salary sacrifice reduces your contractual gross salary, which can affect mortgage applications, statutory maternity/paternity pay, and other salary-linked benefits. It also cannot reduce your pay below the National Minimum Wage. Always check with your payroll or HR team before setting up a new arrangement.
Salary Sacrifice Calculator — FAQs
Salary sacrifice is an arrangement where you agree to give up part of your gross salary in exchange for a non-cash benefit, most commonly a pension contribution. Because the sacrificed amount is deducted before tax and National Insurance are calculated, you save on both, making it one of the most efficient ways to boost your pension.
Savings depend on your tax band and the amount sacrificed. A basic rate taxpayer typically saves 28% (20% tax + 8% NI) on the sacrificed amount, while a higher rate taxpayer can save 42% (40% tax + 2% NI). Use the calculator above to see your exact estimated saving.
For most people, yes. Salary sacrifice pension contributions reduce your taxable income and your National Insurance bill, meaning more of your money goes into your pension for the same net cost to you. The main consideration is whether reducing your gross salary affects other benefits tied to salary, such as mortgage affordability or statutory pay calculations.
Yes, in a beneficial way. Salary sacrifice reduces your taxable income, which can help if you are close to a tax band threshold, including the £100,000 Personal Allowance taper. Reducing your taxable income through salary sacrifice can help restore some or all of your Personal Allowance.
No. Your employer cannot let your salary sacrifice arrangement reduce your pay below the National Minimum Wage or National Living Wage. If a sacrifice would breach this, the arrangement must be reduced or restructured.
Yes. Employers also pay National Insurance on salaries, and salary sacrifice reduces this for them too, which is why many employers actively encourage or even enhance salary sacrifice pension schemes.
Calculations are estimates based on current UK PAYE assumptions and should be used for guidance only. Read our Disclaimer, Privacy Policy and Terms of Use for more information.