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Salary Sacrifice Calculator
The exact cost to your take-home pay of putting salary or a bonus into your pension, on 2026/27 rates
Salary and Bonus Sacrifice Calculator 2026/27
How much tax do you save from salary sacrifice?
Give up some salary, or a bonus, and your employer pays it into your pension instead. You skip income tax and National Insurance on it, and your employer skips its National Insurance too. This compares your pay and pension with and without the sacrifice.
Based on tax rates and allowances in England, 2026/27
Employers save 15% on what you give up. Some pass on part or all of it. Check your scheme.
What the numbers say
Enter your salary and the amount to sacrifice to see the comparison.
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Your pay with and without sacrifice
| Per year | Without sacrifice | With sacrifice | Difference |
|---|---|---|---|
| Gross salary | , | , | , |
| Amount sacrificed | , | , | , |
| Taxable pay | , | , | , |
| Income tax | , | , | , |
| Employee National Insurance | , | , | , |
| Total income tax and NI | , | , | , |
| Take-home pay | , | , | , |
| Sacrifice paid into your pension | , | , | , |
| Additional pension contribution from your employer sharing their NI saving | , | , | , |
| Total pension contribution going in | , | , | , |
| Take-home pay plus pension | , | , | , |
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Illustrative only, not financial advice. This calculator is based on tax rates and allowances in England for 2026/27. Personal allowance £12,570, tapered above £100,000. Basic rate 20% to £50,270, higher rate 40% to £125,140, then 45%. Employee National Insurance 8% between £12,570 and £50,270 and 2% above, employer National Insurance 15% above £5,000. Scottish income tax bands differ. National Insurance is worked out on an annual basis, which is exact for directors and a close approximation for most employees. Student loan repayments, the High Income Child Benefit Charge and pension contributions made outside salary sacrifice are left out. Salary after sacrifice must not fall below the National Minimum Wage. Sacrificed amounts count as employer contributions towards the £60,000 annual allowance, and towards adjusted income for the tapered allowance. A lower salary can affect mortgage applications, statutory pay and life cover based on salary. The results depend entirely on what you enter and your circumstances may differ. Talk your figures through with us, the first conversation is free.
Why sacrifice beats paying the same money in yourself
Salary sacrifice, sometimes called salary exchange, is an agreement with your employer. You give up part of your pay, and your employer pays that amount into your pension instead. Because the money never reaches you as salary, there is no income tax and no National Insurance on it. Your employer pays no National Insurance on it either.
That last part is the difference. A personal pension contribution gets income tax relief but you still pay National Insurance on the money first. Sacrifice removes that too. On the way in, a higher rate taxpayer saves 42% instead of 40%, and a basic rate taxpayer saves 28% instead of 20%. If your employer shares its own 15% saving, the gap widens again.
For anyone earning between £100,000 and £125,140 the case is stronger still. In that band each £1 of pay also removes 50p of personal allowance, an effective 60% rate. Sacrifice pulls income back below the line and restores the allowance. Bonuses are the classic moment to do this, because a bonus paid as cash lands in the highest band you reach. We cover the mechanics in bonus sacrifice: how to save tax. Related tools: the pension tax relief calculator for personal contributions, and the income tax relief modeller for the 60% band. Sacrificed amounts count as employer contributions and towards adjusted income, so check the tapered annual allowance calculator too.
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Three savings, not one
Income tax, your National Insurance, and your employer’s National Insurance. The calculator sets your pay out side by side, with and without sacrifice, and shows how much of the employer saving reaches your pension.
The 60% band is where it pays most
Between £100,000 and £125,140 every £1 sacrificed saves 60p of income tax, plus National Insurance. The calculator flags when you are in that band and shows the allowance restored.
A lower salary has side effects
Sacrifice reduces your contractual salary. That can affect mortgage borrowing, statutory pay and any life cover based on salary. Salary must also stay above the National Minimum Wage.
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Questions people ask about salary sacrifice
What is salary sacrifice for pensions?
It is an agreement to give up part of your salary in return for your employer paying that amount into your pension. The money is treated as an employer contribution. You pay no income tax or National Insurance on it, and your employer pays no National Insurance on it either. Your contract of employment changes to reflect the lower salary, which is why some employers do not offer it.
How much tax does salary sacrifice save?
Take a £70,000 salary and sacrifice £10,000. Income tax falls by £4,000 and National Insurance by £200, so take-home pay drops by £5,800 while £10,000 goes into the pension. Your employer saves £1,500 in National Insurance on top. If it passes that on, the pension receives £11,500 for the same £5,800 of take-home pay. The calculator above runs your own figures.
Can I sacrifice a bonus into my pension?
Yes, and it is often the best moment to do it. A bonus paid as cash is taxed at the highest rate you reach. For many people it is what pushes them into the 60% band above £100,000. Sacrificing it before it is paid avoids that. You usually need to tell your employer before the bonus is announced or paid, so ask early. Switch the calculator to the bonus option, and enter any salary you already sacrifice, to see your own numbers.
Does salary sacrifice affect my State Pension or mortgage?
Your State Pension is unaffected as long as your reduced salary stays above the lower earnings limit. It will for almost everyone using this tool. Mortgage lenders assess your contractual salary, so a lower salary can reduce what you can borrow. Statutory pay such as maternity pay, and life cover expressed as a multiple of salary, can also fall. Check these before committing.
Is there a limit on how much I can sacrifice?
Two limits apply. Your salary after sacrifice must not fall below the National Minimum Wage. And the total going into your pensions, including the sacrificed amount and any other employer contributions, counts towards the £60,000 annual allowance. High earners with adjusted income over £260,000 have a tapered, lower allowance, and sacrificed amounts count towards that income figure. Unused allowance from the previous three years can often be carried forward.
Reviewed by
BSc, MLIBF, PETR, Chartered ALIBF · Co-Founder and Chartered Associate
Chris has spent over a decade in financial planning and specialises in research and technical analysis. He checks every figure and calculation on this page before it is published.
TALK TO A CERTIFIED FINANCIAL PLANNER
A free, no-obligation conversation about how much to sacrifice, the annual allowance and what it means for the rest of your plan. No cost, and no pressure to proceed.