Free calculator
Salary sacrifice calculator
See what paying into your pension through salary sacrifice does to your take-home pay (2026/27) — the income tax and National Insurance saved on the amount sacrificed, and what the contribution really costs you after that saving. An illustration to explore, not scheme advice.
Salary sacrifice can reduce the tax and National Insurance on pension contributions, because the money leaves your pay before either is worked out. Here's the illustrative effect — what going into your pension actually costs your take-home.
This calculator, the result and the breakdown are free for everyone, no account needed.
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How it works
- 1Enter your gross annual salary before any sacrifice.
- 2Enter the amount you'd sacrifice into your pension over the year.
- 3The calculator lowers your taxable and National-Insurable pay by that amount and applies the 2026/27 income-tax bands and National Insurance to work out the saving.
- 4It shows the take-home before and after, the combined tax and NI saved, and the net cost — the actual drop in your take-home for the money going into your pension.
Worked example
A £40,000 salary with £4,000 a year sacrificed into a pension, in England, Wales or Northern Ireland, no student loan. The calculator estimates the income tax and National Insurance saved on the sacrificed £4,000 and the net drop in take-home it costs.
Salary sacrifice lowers your gross pay, so it can affect things linked to it — some benefits, statutory pay and how much a lender offers. Whether your employer passes on their own NI saving is up to them. It's illustrative, not scheme advice.
Frequently asked questions
How does salary sacrifice work?
You agree to a lower gross salary and your employer pays the difference straight into your pension. Because the sacrificed amount isn't taxed or National-Insured as pay, the contribution costs you less take-home than paying in from net pay.
How much National Insurance do I save with salary sacrifice?
You don't pay employee National Insurance on the amount sacrificed, on top of the income tax saved. Enter your salary and sacrifice amount and the calculator estimates both parts of the saving separately.
What is the net cost of a pension contribution?
It's how much your take-home actually falls for the money going into your pension — less than the contribution itself, because of the tax and NI saved. The calculator shows this net cost alongside the gross amount sacrificed.
Are there any downsides to salary sacrifice?
A lower gross salary can affect things linked to it, such as some state benefits, statutory maternity or paternity pay, and mortgage borrowing. You also can't sacrifice below the minimum wage. It's worth checking your own position first.