Pension salary sacrifice calculator 2026/27
Salary sacrifice exchanges part of your gross pay for an employer pension contribution before tax is applied — saving both Income Tax and National Insurance. Enter your salary and sacrifice amount to see the full effect on your take-home pay and pension pot.
Calculate your sacrifice savings →How salary sacrifice works
You agree contractually to a lower gross salary, and your employer pays the difference straight into your pension. Because your taxable salary falls, you pay less Income Tax and less National Insurance — and your employer saves employer NI too, which some employers add to your pension.
Two caveats: your contractual salary cannot fall below the National Minimum Wage, and a lower headline salary can affect salary-linked benefits such as mortgage affordability assessments and statutory pay.
Frequently asked questions
What is pension salary sacrifice?
An arrangement where you give up part of your gross salary and your employer pays it into your pension instead. Because the sacrificed amount never counts as taxable pay, you save both Income Tax and National Insurance on it.
How much do I save with salary sacrifice?
A basic-rate taxpayer saves 28% of the sacrificed amount (20% tax + 8% NI); a higher-rate taxpayer saves 42% (40% + 2%). Your employer also saves employer NI, which some pass into your pension.
Are there downsides to salary sacrifice?
Your contractual pay cannot drop below the National Minimum Wage, and a lower gross salary can reduce mortgage borrowing multiples, statutory maternity pay and other salary-linked benefits.