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Salary Sacrifice Calculator

Salary sacrifice swaps part of your salary for a non-cash benefit, most often a pension contribution. You save Income Tax and NI on the amount sacrificed. Add a fixed amount under 'Salary sacrifice' for car or cycle schemes.

Tax year 2026/27 · Estimates, not personal tax advice

£
Pay frequency
%
Student loans
£

e.g. EV or cycle scheme

£

Taxable value

£

Taxed, no NI

£

After tax

Your results

Enter your salary to see take-home pay by year, month, week, day and hour.

Using 2026/27 rates (6 April 2026 to 5 April 2027). Nothing you enter is stored or sent anywhere.

Rates and rules used

Tax year 2026/27

Default year 2026/27 (6 April to 5 April). 2025/26 and 2024/25 figures are kept for comparison where the calculator offers a year choice.

Independent site, not affiliated with HMRC. Always check GOV.UK for the latest figures.

How this calculation works

  1. 01Start with your gross income and convert it to an annual figure.
  2. 02Take off salary sacrifice and net pay pension contributions.
  3. 03Apply your Personal Allowance, tapered above £100,000 or set by your tax code.
  4. 04Calculate Income Tax band by band using rates for your region.
  5. 05Calculate employee National Insurance on earnings after salary sacrifice.
  6. 06Deduct relief at source pension contributions at 80% of the gross amount.
  7. 07Apply student and postgraduate loan repayments above each threshold.
  8. 08Subtract everything to reach estimated net pay, then split it by period.

Real payroll can differ because tax and NI are worked out per pay period, and your tax code may include adjustments HMRC hasn't told you about. See our methodology.

Why it can be worth more than ordinary contributions

Because NI is worked out after the sacrifice, a basic-rate taxpayer saves 28p in every £1 (20% tax plus 8% NI), compared with 20p through relief at source. Some employers also pass on their own NI saving.

Things to check first

Your cash salary must not fall below the National Minimum Wage. A lower contractual salary can affect mortgage applications, statutory pay and some life cover. From April 2029 the government plans to cap NI-free pension salary sacrifice at £2,000 a year.

Understanding your salary sacrifice calculator result

The comparison shows the change in cash pay and the amount redirected to the selected benefit. Savings arise only where the arrangement reduces the earnings used for tax or National Insurance.

Testing a pension sacrifice

Scenario: Enter current salary, then add the proposed annual sacrifice. Compare the result with the same salary and no sacrifice.

How to use the result: The fall in take-home pay is the effective personal cost. Compare it with the amount added to the pension, and check whether the employer shares any of its own saving.

Details to check before relying on the estimate

  • The arrangement must not reduce cash pay below minimum wage.
  • A lower contractual salary can affect salary-linked benefits or borrowing.
  • Confirm how the employer treats bonuses, overtime and statutory pay.

Putting the estimate into perspective

Ask the employer for the proposed cash salary and benefit terms in writing. Compare that arrangement with the estimate rather than assuming every employer passes on the same savings.

Frequently asked questions

Does salary sacrifice reduce student loan repayments?

Yes. Repayments are based on earnings after the sacrifice.

Check it on GOV.UK: Repaying your student loan (opens GOV.UK in a new tab) · Salary sacrifice and the effects on PAYE (opens GOV.UK in a new tab)

Can salary sacrifice get my Personal Allowance back?

Yes. If it brings adjusted net income below £100,000, you recover allowance lost to the taper.

Check it on GOV.UK: Salary sacrifice and the effects on PAYE (opens GOV.UK in a new tab) · Income Tax rates and allowances (opens GOV.UK in a new tab)

Does salary sacrifice reduce National Insurance as well as tax?

Yes. Because your contractual pay is lower, both Income Tax and National Insurance are calculated on the smaller amount. That is what separates it from a normal pension deduction.

Check it on GOV.UK: Salary sacrifice and the effects on PAYE (opens GOV.UK in a new tab) · National Insurance rates and category letters (opens GOV.UK in a new tab)

Are there downsides to salary sacrifice?

A lower contractual salary can affect mortgage affordability, some state benefits and other pay-linked entitlements. Ask your employer and pension provider how it applies to you.

Check it on GOV.UK: Salary sacrifice and the effects on PAYE (opens GOV.UK in a new tab)

Related calculators

Related guides

  • Salary Sacrifice Explained — How salary sacrifice works for pensions, electric cars and cycle schemes, how much tax and NI you save, and the downsides to check.
  • Pension Tax Relief — How pension tax relief works in the UK, the difference between net pay and relief at source, and how higher-rate taxpayers claim extra relief.