UK Salary Sacrifice Calculator
How much tax and NI does sacrificing into your pension really save? 2026/27 bands. Free, private, no signup.
Your salary sacrifice
Many employers pass on some or all of the 15% NI they save.
What the sacrifice buys you
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Income tax saved-
Employee NI saved-
Take-home pay falls by only-
Your marginal rate on the sacrificed pay-
Salary sacrifice: the UK's best legal tax trick
You agree to a lower salary; your employer pays the difference straight into your pension. Because the sacrificed pay never counts as salary, you skip income tax AND National Insurance on it — unlike ordinary pension contributions, which only save income tax.
- Every £1 sacrificed at 40% + 8% NI costs you 52p of take-home but puts £1 (plus your employer's NI saving) in your pension. Instant ~92% uplift before any investment growth.
- The £100k–£125k trap is where it shines. Losing personal allowance makes your marginal rate 60% — sacrificing salary back under £100k recovers allowance at 60p in the pound. Try £110,000 above.
- Watch the annual allowance (£60,000) and the money-purchase annual allowance if you've already accessed pension flexibly. And keep salary above minimum wage after sacrifice.
FAQs
Salary sacrifice vs normal pension contributions?
Normal (relief-at-source) contributions save income tax but not NI. Salary sacrifice saves both — typically an extra 8% (or 2%) on top.
Does it affect my state pension?
Only if sacrifice drops you below the lower earnings limit (£6,500/year) — very unlikely at typical salaries. Check if you're near thresholds.
Can my employer refuse?
They don't have to offer it, but most do — they save 15% employer NI on every sacrificed pound, so it's in their interest too.
What about the 60% tax trap?
Between £100,000 and £125,140, withdrawn personal allowance pushes your marginal rate to 60%. Sacrificing down to £100,000 is the single highest-value pension move in the UK tax code.
Is my data sent anywhere?
No. Everything is computed in your browser; nothing leaves your device.
Disclaimer: Estimates for illustration, computed in your browser — no data leaves your device. 2026/27 England/Wales/NI bands; Scotland differs. Excludes student loans, benefits in kind, and tapered annual allowance. Not financial advice.