This salary sacrifice calculator compares paying into your workplace pension the normal way with salary sacrifice. With salary sacrifice you give up part of your salary and your employer pays it into your pension instead, so you save National Insurance as well as Income Tax.
Salary sacrifice vs a normal contribution
- Take-home now (a month)
- –
- Take-home with sacrifice (a month)
- –
- Extra take-home a year
- –
- Into your pension a year
- –
| Normal | Salary sacrifice |
|---|
In the example, someone on £45,000 paying 5% into their pension takes home £180.00 more a year with salary sacrifice, because they save 8% NI on the £2,250 sacrificed. If their employer passes on its 15% NI saving, their pension gets an extra £337.50 too.
How to use the salary sacrifice pension calculator
- Enter your salary before any sacrifice.
- Enter your pension contribution as a percentage, and your employer’s.
- Tick the box if your employer adds some or all of its NI saving to your pension.
- Choose your student loan plan; repayments also fall with salary sacrifice.
How salary sacrifice saves money
Under a normal net pay arrangement, your pension contribution comes off your pay before Income Tax but after National Insurance. With salary sacrifice, your contractual salary is lower, so you pay less Income Tax, less NI and less student loan. HMRC explains the rules in its salary sacrifice guidance.
Pension salary sacrifice calculator examples
| Salary | 5% contribution | Your NI saving a year | Employer NI saving |
|---|---|---|---|
| £25,000 | £1,250 | £100 | £188 |
| £35,000 | £1,750 | £140 | £262 |
| £45,000 | £2,250 | £180 | £338 |
| £60,000 | £3,000 | £60 | £450 |
| £80,000 | £4,000 | £80 | £600 |
The salary sacrifice calculator shows the biggest saving for basic rate taxpayers, who save 8% NI, and for anyone with a student loan, who also saves 9% in repayments. Higher rate taxpayers save 2% NI on the sacrifice.
Things to check before you agree
- Your salary after sacrifice must not fall below the National Minimum Wage.
- A lower salary can reduce statutory pay, such as maternity pay, and some mortgage lenders look at the lower figure.
- Life cover and other benefits linked to salary usually use your pre-sacrifice salary, but check.
- You can usually only change your sacrifice once a year or after a life event.
Changes from April 2029
The government plans to cap NI relief on pension salary sacrifice at £2,000 a year from 6 April 2029. Sacrifice above £2,000 will still save Income Tax, but NI will be charged on the excess. The salary sacrifice calculator shows the current rules.
Related calculators
See the tax relief on personal contributions with the pension tax relief calculator, or cars through salary sacrifice with the company car tax calculator.
Frequently asked questions
Is salary sacrifice worth it?
For most employees, yes. It saves NI on pension contributions and can boost your pension if your employer shares its saving. Low earners near the minimum wage should check first.
What is salary exchange?
Another name for salary sacrifice. Some employers, including the NHS for some schemes, use the term “salary exchange”.
Does salary sacrifice affect my State Pension?
Not if your salary stays above the Lower Earnings Limit, so the year still counts as a qualifying year.
Does salary sacrifice help with Child Benefit?
Yes. It lowers your adjusted net income, which can reduce the High Income Child Benefit Charge.
About this calculator
This salary sacrifice calculator uses 2026/27 tax, NI and student loan rates, checked against GOV.UK on 9 November 2026. It compares salary sacrifice with a net pay arrangement. Results are estimates.