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UK Salary Calculator2026/27 tax year

Salary sacrifice calculator

Sacrificing £5,000.00 into your pension costs you only £3,600.00 of take-home pay — you save £1,000.00 of income tax and £400.00 of National Insurance, and your employer saves £750.00.

2026/27 rates. Assumes a standard tax code and no student loan — add those in the full calculator.

Sacrifice entered as

Take-home pay with salary sacrifice

£35,919.60

£2,993 a month£5,000.00 into your pension

Every £1 in the pension costs you £0.72 of take-home pay

With vs without sacrifice

Without sacrifice

£39,519.60

take-home pay, nothing into the pension

With sacrifice

£35,919.60

plus £5,000.00 into the pension

Where the saving comes from

Income tax saved
£1,000.00
Employee National Insurance saved
£400.00
Total saved by you
£1,400.00
Employer's National Insurance savedYour employer keeps this, unless the scheme passes it on
£750.00

Cost to you of the pension contribution

£3,600

£5,000.00 lands in your pension for £3,600.00 of lost take-home — the difference is the tax and National Insurance you no longer pay.

How salary sacrifice works

You agree a lower contractual salary, and your employer pays the difference into your pension. Because the money never counts as your pay, it escapes both income tax and National Insurance — unlike a normal pension contribution from net pay, which only gets income tax relief.

That is the whole advantage: the same money into the pension for less take-home given up. The employer also avoids its 15% secondary National Insurance on the sacrificed amount, which some schemes add to the pot on top.

The trade-off is that your official salary really is lower. Anything worked out from gross pay — mortgage affordability, statutory maternity pay, some death-in-service cover — is based on the reduced figure. And you cannot sacrifice below the National Minimum Wage.

Salary sacrifice questions

Sources & last updated

Rates checked against the sources above and last reviewed for the 2026/27 tax year. This is a guidance tool, not tax or legal advice — for anything that turns on your own circumstances, speak to a qualified adviser. See how we calculate for the full method.