Free UK pay tool · 2026/27
Salary sacrifice pension calculator
See how much of your salary goes into your pension, what it costs in monthly take-home pay, and how Income Tax and employee NI change.
How the salary sacrifice pension calculator works
Enter your annual salary and the percentage of full salary you want to sacrifice. We compare a baseline with no pension contribution against the entered salary sacrifice. The table separates pension funding, cash salary, Income Tax, employee NI and take-home pay.
- Income Tax is estimated on the lower cash salary.
- Employee National Insurance is estimated after the sacrifice.
- The pension contribution is kept separate from spendable take-home pay.
Example: £50,000 salary with 5% sacrifice
Under this tool’s assumptions, £2,500.00 goes into the pension each year (£208.33 a month). Estimated Income Tax falls by £500.00 and employee NI by £200.04 a year. The reduction in take-home is £1,799.96 a year, or £150.00 a month.
The pension contribution is not money available to spend now. This example excludes existing employer contributions, any employer NI saving added to the pension and pension investment returns.
What the savings comparison means
“Tax + NI saved” is the difference from paying nothing into a pension. It is not the extra saving from switching an existing pension to salary sacrifice: net-pay and relief-at-source pensions can also receive tax relief. Use the full take-home calculator to estimate those pension methods separately with the same salary and contribution.
Salary exchange and salary sacrifice
Some employers call the arrangement salary exchange. The principle is the same: you agree to a lower contractual cash salary and your employer contributes the exchanged amount to your pension.
What can change the result?
This calculator assumes England, 1257L, category A employee NI, evenly spread monthly pay, one employment and no student loan. It applies the contribution to full gross salary, not qualifying earnings. Your region, tax code, other income and deductions can change the result; our methodology explains the calculation limits.
Your employer must offer and agree to the arrangement. Sacrifice must not reduce cash pay below the applicable minimum wage. We do not collect age or working hours here, so the result is not an eligibility check. Scheme restrictions, pension annual-allowance charges and effects on statutory pay or benefits are not modelled.
Read HMRC’s salary-sacrifice guidance and the official 2026/27 rates and thresholds before discussing a change with your employer.
Frequently asked questions
How much tax can salary sacrifice save?
The saving depends on your earnings and contribution. This calculator compares Income Tax and employee NI with no pension contribution against the entered salary sacrifice. It does not measure the extra saving over an ordinary pension arrangement, which can also receive tax relief.
Is salary exchange the same as salary sacrifice?
Salary exchange is another common name for salary sacrifice. In both cases, contractual cash salary is reduced and the employer pays the agreed amount into the pension instead.
Does salary sacrifice reduce take-home pay by the full pension contribution?
Usually not. Take-home pay falls by less than the pension contribution because the sacrificed amount can reduce Income Tax and employee National Insurance.
Can salary sacrifice reduce pay below minimum wage?
No. An employer must not allow salary sacrifice to reduce cash earnings below the applicable National Minimum Wage, and its own scheme may impose additional limits.
Does the result include my employer’s pension contribution?
No. Pension funding here is only the cash salary you sacrifice. Existing employer contributions, employer matching and any employer NI savings passed into the pension are excluded. Check your employer’s scheme for those amounts.
Related pay calculators
These are estimates for one employment using 2026/27 rules. For tax codes, student loans, different UK regions and other deductions, use the full take-home pay calculator. Read how we calculate your pay for the rates, assumptions and limits.