Salary Sacrifice Pension Calculator
Compare a salary-sacrifice pension contribution with relief at source and net pay at 2026/27 rates — take-home under each, income tax, employee and employer NI and student loan saved, the bigger sacrifice your take-home could fund, Scottish rates, minimum-wage checks and the planned 2029 £2,000 NI cap.
How it works
Sacrifice: tax, NI and student loan on (salary − contribution); pension = contribution + employer NI saved × share passed on · relief at source: you pay 80% from taxed pay, the provider adds 20%, higher-rate relief = tax(salary) − tax(salary − contribution) − 20% · net pay: tax on (salary − contribution), NI on full salary · employer NI = 15% above £5,000; employee NI 8% £12,570–£50,270, 2% above
With salary sacrifice you agree to a lower contractual salary and your employer pays the difference into your pension. Because your pay is lower, you save income tax, employee National Insurance (8% up to £50,270, 2% above) and any student loan repayment, and the employer saves 15% NI, which many add to your pension. The calculator works out take-home pay and pension under all three ways of paying in: salary sacrifice, relief at source (you pay 80% from net pay and the provider adds 20%, with higher-rate relief claimed back) and a net pay arrangement (no NI saving). It also finds how much more you could sacrifice for the same take-home as relief at source, and checks that the reduced salary stays above the National Living Wage. Scottish income-tax bands for 2026/27 are included. The government plans to cap the NI advantage at £2,000 of sacrifice a year from April 2029; switch the option on to preview it. The catch is that your contractual salary really is lower, which can affect mortgage applications, statutory maternity pay and pay-linked life cover.
Worked example
£45,000 sacrificing 8% (£3,600): salary falls to £41,400, income tax to £5,766 and NI to £2,306.40, leaving take-home of £2,777.30 a month. Paying the same gross £3,600 by relief at source leaves £2,753.30 a month, so sacrifice is £288 a year better off. The employer saves £540 of NI; passed on in full, the pension gets £4,140 a year. For the same take-home as relief at source you could sacrifice £4,000, putting £4,600 into the pension.
Sources: GOV.UK — Rates and thresholds for employers 2026 to 2027 · GOV.UK — Salary sacrifice for employers · GOV.UK — Budget 2025 (salary sacrifice NI cap from 2029)
Frequently asked questions
Does salary sacrifice affect my State Pension?
Only if your salary after sacrifice drops below the lower earnings limit (£6,708 a year in 2026/27). Above it you still earn National Insurance qualifying years even though you pay less NI.
Can higher-rate taxpayers still benefit?
Yes. They get full 40% or 45% relief immediately rather than claiming it back, plus the 2% NI saving above £50,270. If sacrifice brings income under £100,000 it also restores the personal allowance.
What is the 2029 salary sacrifice cap?
The government has announced that from 6 April 2029 pension contributions made by salary sacrifice above £2,000 a year will attract employee and employer NI like normal pay. Income-tax relief is unaffected. Turn on the 2029 option to see the effect.
Can salary sacrifice take me below the minimum wage?
No. Your cash pay after sacrifice must stay at or above the National Minimum Wage for the hours you work (£12.71 an hour from April 2026 for those 21 and over). Enter your weekly hours and the calculator warns you if the sacrifice is too large.
Does salary sacrifice reduce my student loan repayments?
Yes. Repayments are based on your pay after sacrifice, so the 9% (or 6% postgraduate) deduction falls. Under relief at source and net pay the repayment stays the same. Pick your plan under More options.
Related calculators
Uses 2026/27 UK income tax (rUK and Scotland), Class 1 NI, student loan thresholds and the National Living Wage. Thresholds change every April — check GOV.UK. Educational estimate, not tax or pension advice.