Salary Sacrifice Pension Calculator
See how much Income Tax and National Insurance you could save by sacrificing salary into your pension, plus your employer’s NI saving and total pension boost.
Calculate Your Salary Sacrifice Savings
Enter your gross salary and the percentage you’d like to sacrifice into your pension to instantly see your Income Tax and National Insurance savings.
Salary Sacrifice Calculator
Compare your take-home pay and pension pot with and without sacrifice.
How it Works
Understanding salary sacrifice calculations
Reduce Gross Salary
The percentage you choose to sacrifice is deducted from your gross salary before tax and National Insurance are worked out.
Tax & NI on the Lower Salary
We calculate Income Tax and employee National Insurance on both your original and reduced salary to find the exact amount saved.
Employer NI Saving
Your employer also stops paying National Insurance on the sacrificed amount. Some employers add some or all of this saving to your pension.
Total Pension Boost
Your sacrificed salary, any existing employer contribution, and any passed-on NI saving are added together as your total annual pension contribution.
Tax & NI Rates Used
A general overview of the standard Income Tax and National Insurance rates and thresholds this calculator applies.
| Band / Threshold | Rate | Applies To |
|---|---|---|
| Personal Allowance | £12,570 (tapered above £100,000) | Tax-free portion of income |
| Basic Rate Income Tax | 20% | Taxable income up to £37,700 |
| Higher Rate Income Tax | 40% | Taxable income up to £125,140 |
| Additional Rate Income Tax | 45% | Taxable income above £125,140 |
| Employee National Insurance | 8% / 2% | Earnings between £12,570–£50,270 / above £50,270 |
| Employer National Insurance | 15% | Earnings above £9,100 (Secondary Threshold) |
Salary Sacrifice FAQ
Answers to the most frequently asked questions about salary sacrifice pension arrangements in the UK.
Salary sacrifice is an arrangement where you agree to give up part of your gross salary in exchange for your employer paying that amount into your pension as an employer contribution. Because the sacrificed amount never appears as your salary, you avoid paying Income Tax and National Insurance on it.
Most employees save National Insurance at 8% or 2% on the sacrificed amount, depending on their earnings, on top of any Income Tax relief they would already get from pension contributions. Higher earners who fall back under the £100,000 personal allowance taper, or under the additional rate threshold, can save considerably more.
Yes. Employers also pay National Insurance on your salary, so reducing your gross salary through sacrifice lowers their NI bill as well. Some employers choose to pass some or all of this employer NI saving into your pension pot, boosting your total contribution further.
Because your official gross salary is reduced, it can affect income-based calculations such as mortgage affordability, Statutory Maternity Pay, and some means-tested benefits. Salary sacrifice can also bring your pay below the National Minimum Wage, which is not permitted, so lower earners should check this carefully.