Salary sacrifice calculator
Salary sacrifice means contractually giving up pay in exchange for your employer paying it into your pension instead. Because the sacrificed pay never reaches you, it escapes both income tax and National Insurance: which makes it the cheapest way to fill a pension, and the reason £1 in the pot can cost as little as 58p of take-home. Your employer may not call it that: salary exchange, SMART pay and pension exchange are the same arrangement under a different name. Sacrificing salary for a car or another perk works differently: that is taxed as a benefit in kind, which the BiK calculator prices.
Calculator
Salary sacrifice calculator
6.7% of salary
2026/27 rates, checked 28 August 2026. No student loan, add one on the main calculator.
£3,000 goes into your pension. Your take-home falls by only
£2,160.00
Each £1 in the pot costs you £0.72 of take-home.
Before and after
| No sacrifice | With sacrifice | |
|---|---|---|
| Salary for tax purposes | £45,000.00 | £42,000.00 |
| Income tax | −£6,486.00 | −£5,886.00 |
| National Insurance | −£2,594.40 | −£2,354.40 |
| Into your pension | £0 | £3,000.00 |
| Take-home | £35,919.60 | £33,759.60 |
Getting the same £3,000 into your pot by relief at source would cost £2,400.00 from taxed pay up front (the provider adds the basic-rate 20%), with higher-rate relief claimed back later, and it saves no National Insurance. Sacrifice is the only arrangement that does.
How the saving breaks down
A basic-rate taxpayer saves 20% income tax plus 8% National Insurance on every pound sacrificed, each £1 in the pot costs 72p. A higher-rate taxpayer saves 40% plus 2%: 58p per £1. Between £100,000 and £125,140, the personal allowance taper pushes the effective saving above 60%, so a sacrifice in that range can cost less than 38p per £1, the strongest pension incentive anywhere in the UK system.
What else changes when you sacrifice
- Student loans: repayments are worked on post-sacrifice pay, so sacrificing also cuts your loan repayment (9% of the amount for most plans).
- Statutory pay: maternity pay, sick pay and mortgage affordability are assessed on your reduced contractual salary. Sacrifice cannot take you below the National Minimum Wage.
- Childcare and the £100k cliff: sacrifice reduces adjusted net income, so it can restore free childcare hours and Child Benefit as well as allowance.
The 2029 cap
From April 2029 the government has announced that salary sacrifice above £2,000 a year will no longer be exempt from National Insurance. Contributions above the cap will still save income tax, but the NI advantage, the thing that makes sacrifice unique, will be limited. Until then, the full saving applies, contributions made before 2029 keep an advantage the same contributions made after it will not. Whether front-loading fits your situation is an advice question, not an arithmetic one.
Sacrifice vs the other two arrangements
A net pay contribution comes out before tax but after NI is worked out, it saves tax only. Relief at source comes out of taxed pay; your provider reclaims basic-rate relief, and higher-rate taxpayers must claim the rest through self-assessment (many never do). Only sacrifice saves NI. The main calculator models all three so you can see the difference on your own numbers.
The most valuable contribution is rarely a round percentage. It is the one that lands your income exactly on a threshold, out of the taper or back to basic rate. The pension sweet spot calculator works out that figure and what it costs you in spendable pay.
2026/27 HMRC rates, checked 28 August 2026 by Hadi. Sources and method on the about page. This is a calculation, not financial advice, sacrifice is a contract change and worth checking against your own scheme rules.
How to use the salary sacrifice calculator
- 1
Enter your gross salary before any sacrifice.
- 2
Set the amount or percentage you want to give up, and what it buys: pension, a car, cycle to work or childcare vouchers.
- 3
Compare the three pension routes shown, because the same contribution produces three different take-home figures.
- 4
Read the real cost per £100 into the pension, which is what the arrangement is actually worth to you.
When should you use the salary sacrifice calculator?
Use it whenever your employer offers sacrifice, and especially when your income is near £60,000 or £100,000, where it is worth most.
Your employer offers salary sacrifice
It comes out before tax and National Insurance, so it costs you less than the same contribution paid any other way.
You are near £100,000
Sacrifice reduces adjusted net income, which can pull you back out of the allowance taper and the childcare cliff.
Children, and income near £60,000
Reducing adjusted net income can cut or clear the High Income Child Benefit Charge.
One job offer has a better pension
Two jobs with the same salary but different pension arrangements do not pay the same.
Where to go next
- Pension tax relief calculatorTo check the relief you can claim if your scheme is relief at source.Open
- Pension sweet spot calculatorTo find the contribution level with the highest effective relief.Open
- Adjusted net income calculatorTo see the figure the taper and the charge are measured against.Open
All 51 calculators share one tested engine, so a figure from the salary sacrifice calculator agrees with every other page here. See the full calculator index or the pay and tax guides.