What salary sacrifice really costs you

Pay into your pension before tax and see the real hit to take-home.

Your details

Your result

Each £1 you sacrifice costs your take-home£0.58
  • Cost to your take-home58%£2,552
  • Tax and NI you save42%£1,848
You sacrifice£4,400
Your employer adds£1,650
Total into your pension a year£6,050
Take-home falls by£2,552
Assumptions and limits

From April 2029, NI relief on salary sacrifice will be capped at £2,000 a year; above that you’ll pay NI on the sacrificed amount. Employer NI saving shown at 15%. Check your pay stays above the National Minimum Wage.

Sources: Income Tax rates · National Insurance rates · Tax on pension contributionsTax year 2026/27

Common questions

What is salary sacrifice?

You agree to a lower salary, and your employer pays the difference into your pension. Because your salary is lower, you pay less income tax and National Insurance.

What changes in 2029?

From 6 April 2029, only the first £2,000 a year you sacrifice will be free of National Insurance. Income tax relief stays the same.

Are there any downsides?

A lower salary can reduce how much a mortgage lender offers, and some benefits linked to salary, such as life cover or statutory pay. Your pay must also stay above the National Minimum Wage.

How we calculate

Every calculator uses the published 2026/27 rates from one shared set of rules, so when a rate changes, it changes everywhere.

Where rates come from

Tax, National Insurance, student loan, benefit and property tax rates come from GOV.UK. Each calculator links to its sources.

What we don’t cover

Scottish income tax bands, tax codes other than 1257L, benefits in kind and your personal circumstances. Results are estimates to help you plan, not a payslip or advice.