United Kingdom · Updated for 2026/27
Salary sacrifice calculator 2026/27
Paying 5% of a £35,000 salary (£1,750 a year) into your pension by salary sacrifice leaves you £140.00 a year more than net pay or relief at source, for the same pension, and saves your employer £262.50 of National Insurance.
Type your salary and what you pay into your pension. The three ways of paying in are compared side by side.
£35,000 salary · £1,750.00 a year into your pension
£140.00 a year more take-home with salary sacrifice
than relief at source, after claiming any higher-rate relief. Pension: £1,750.00 a year by salary sacrifice.
| Take-home a year | Into your pension | |
|---|---|---|
| Relief at source | £27,319.60 | £1,750.00 |
| Net pay | £27,319.60 | £1,750.00 |
| Salary sacrifice | £27,459.60 | £1,750.00 |
Salary sacrifice saves your employer £262.50 of National Insurance a year. Some employers add it to your pension.
How do the three ways of paying in compare?
- Relief at source: the money comes out of your take-home pay and your pension provider adds basic-rate tax relief. A higher-rate payer claims the rest through Self Assessment.
- Net pay: your employer takes the money before income tax, so you get all your tax relief at once.
- Salary sacrifice: you give up part of your salary and your employer pays it into your pension. You pay no income tax and no National Insurance on it, and your employer saves its NI (15%) too.
The pension gets the same either way; salary sacrifice leaves you more take-home because of the National Insurance. Our guide to pension tax relief explains each one with worked examples.
What changes from April 2029?
The government has announced that from 6 April 2029 only the first £2,000 a year of pension contributions made by salary sacrifice will be free of National Insurance, for you and your employer. Income tax relief doesn’t change. On a £60,000 salary sacrificing £6,000 a year, NI would be due on £4,000: at today’s rates, £80.00 a year for you and £600.00 for your employer. GOV.UK sets out the changes to salary sacrifice for pensions.
What about cycle to work and electric car schemes?
They work in a similar way. With cycle to work, you give up some salary each month in return for the loan of a bike and safety kit, and you pay no income tax or National Insurance on the salary you gave up. You may be offered the chance to buy the bike at the end. With an electric car scheme, you give up salary for a company car; you save income tax and NI on that salary, but you pay tax on the car as a benefit, which is low for electric cars. Your employer can show you the real figures for either.
What should I check first?
A sacrifice lowers your salary on paper, which can lower Statutory Maternity Pay, some life cover and what a mortgage lender sees. It can never take your pay below the National Minimum Wage. Higher earners near £100,000 can use it to stay out of the 60% trap: the bonus tax calculator shows the trap at work.
What else can I work out?
- Bonus tax calculator How much of a bonus you keep, the bonus month payslip, and the 60% trap.
- Pay rise calculator The extra take-home from a rise, and how much of it goes in tax, NI and loans.
- Student loan repayment calculator Your monthly repayment, and whether the loan is paid off or written off, and when.
- Salary calculator Take-home pay on any salary, with tax codes, Scotland, pensions and student loans.
Every UK tool on one page: salary and tax tools. How the rules work: UK pay and tax guides.
Questions about salary sacrifice
Is salary sacrifice better than relief at source?
For take-home pay, usually yes: all three ways give you income tax relief, but only salary sacrifice also saves National Insurance (8% on pay up to £50,270, 2% above). Net pay and relief at source come out the same once a higher-rate payer has claimed their extra relief.
What is the 2029 salary sacrifice cap?
From 6 April 2029, only the first £2,000 a year of pension contributions made by salary sacrifice will be free of National Insurance. Above that, you and your employer will pay NI on the rest, though it will still be free of income tax. The calculator shows what that would cost at today’s rates.
Does salary sacrifice lower my student loan repayments?
Yes. Repayments are worked out on your pay after the sacrifice, so they go down too. Net pay and relief at source don’t change them.
Can salary sacrifice affect my maternity pay or a mortgage?
It can. Your salary is lower, so Statutory Maternity Pay (worked out on your earnings) can be lower, and some lenders look at the salary after the sacrifice. The maternity pay calculator shows SMP on any pay.
Will my employer add its National Insurance saving to my pension?
Some do, some keep it. Tick the box in the calculator if yours adds it, and the extra goes into your pension.