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Salary sacrifice calculator
Swap salary for pension and skip tax and National Insurance on every pound: see exactly what your take-home loses, what your pot gains, and what your employer's NI saving could add.
Tax year 2026/27, England, Wales and NI tax bands (Scottish rates differ slightly). Your employer saves 15% NI on every pound you sacrifice; some schemes pass part or all of that into your pot. Ask payroll what yours does.
Into your pension each month
£166.67
for £120.00 less take-home a month
Every £100 into your pension costs you £72.00 of take-home pay.
- Salary sacrificed£2,000/yr
- Employer NI saved (15%)£300/yr
- Take-home before£32,320/yr
- Take-home after£30,880/yr
- Total into your pension£2,000/yr
Comparing with a standard workplace scheme? Pension contribution calculator.
Common questions
- How does salary sacrifice work?
- You agree to a lower salary and your employer pays the difference straight into your pension as an employer contribution. Because that pay never reaches you, there is no income tax, no employee National Insurance and no employer National Insurance on it. The full amount lands in your pot while your take-home falls by much less.
- How much does £100 of salary sacrifice really cost me?
- On a £35,000 salary, sacrificing £1,750 a year (5%) only drops your take-home by £1,260, because you save £350 income tax and £140 National Insurance. That works out at £72 of take-home for every £100 into the pension. A higher-rate taxpayer pays around £58 per £100, and less again if the employer shares their NI saving.
- Is salary sacrifice better than a normal pension contribution?
- For basic-rate taxpayers, usually yes. Relief-at-source gives you 20% tax relief, so £100 in the pot costs £80. Salary sacrifice also skips 8% employee NI, so the same £100 costs £72, and if your employer passes on their 15% NI saving it can fall to around £63. Higher earners gain too, just by a smaller NI margin (2%).
- What is the employer NI saving and do I get it?
- Your employer pays 15% National Insurance on most of your salary in 2026/27, so every £1,000 you sacrifice saves them £150. Some employers keep that saving, others pass some or all of it into your pension as an extra contribution. It is worth asking payroll, because on a £6,000 annual sacrifice a full pass-through adds £900 a year to your pot for free.
- Can I sacrifice as much salary as I like?
- No. A sacrifice cannot take your contractual pay below the National Minimum Wage, which is £12.71 an hour for over-21s from April 2026, roughly £24,800 a year full time. A lower headline salary can also shrink salary-linked benefits such as life cover, maternity pay or the mortgage you can borrow, so check before you commit.
- Does salary sacrifice reduce my student loan repayments?
- Yes. Student loan repayments are calculated on your post-sacrifice pay, so sacrificing salary cuts the 9% repayment too. On Plan 2, sacrificing £3,500 from a £35,000 salary trims about £315 a year off your loan repayment. That money stays in your pocket now, though the loan balance takes longer to clear. This is guidance, not regulated financial advice.
Not on a sacrifice scheme? The pension contribution calculator covers standard workplace schemes, and the take-home pay calculator shows your full payslip picture.