Salary Sacrifice Calculator
Enter your salary and the amount you give up. See the income tax and National Insurance saved and the fall in take-home pay.
Uses the 2026/27 UK tax year figures for England, Wales and Northern Ireland, checked against GOV.UK on 18 October 2026. This is an estimate to help you plan and not advice.
Worked examples
£5,000 from a £50,000 salary
£50,000 salary, £5,000 given up
Take-home falls by £3,600
Income tax saved £1,000, your National Insurance saved £400, employer saves £750.
About Salary Sacrifice Calculator
With salary sacrifice, you agree with your employer to take a lower salary, and the employer pays the difference into your pension. Because your pay is lower, you pay less income tax and less employee National Insurance. That is more than the tax relief you would get by paying in from your take-home pay, since National Insurance is saved as well.
Your employer saves National Insurance too, at 15%, and some employers add part of that saving to your pension. Enter your salary, the amount you want to give up and the share of the employer's saving that is passed on. The page shows the new salary, the tax and National Insurance saved, how much your take-home pay really falls, and the cost of each £1 in your pension.
How to use Salary Sacrifice Calculator
- Enter your yearly salary.
- Enter the amount you want to give up, as pounds or a percentage.
- Add the share of your employer's National Insurance saving that goes to your pension, if known.
- Read the savings and the fall in take-home pay.
Common uses
- Deciding whether to join a salary sacrifice scheme
- Seeing how much a higher rate taxpayer saves
- Estimating the real cost of a bigger pension contribution
- Checking an employer's salary sacrifice offer
Sources
Last reviewed 18 October 2026.
Frequently asked questions
How does salary sacrifice save money?
The amount you give up is not part of your pay, so no income tax or employee National Insurance is taken on it. On £5,000 a basic rate taxpayer saves £1,000 income tax and £400 National Insurance.
Are there downsides?
Your salary is lower on paper, which can affect mortgage applications, life cover based on salary and some other benefits. Your pay cannot fall below the National Minimum Wage.
What does my employer save?
Employers pay 15% National Insurance on pay above £5,000 a year per employee, so they save 15% of the amount you give up. Some pass part of it back as extra pension.
Is it better than relief at source?
For most people it is better, since you save National Insurance as well as income tax. Compare using the pension tax relief calculator.
Does it cover Scotland?
The calculation uses the bands for England, Wales and Northern Ireland, so Scottish taxpayers will see different savings.