Salary sacrifice calculator 2026/27
Paying into your pension by salary sacrifice saves Income Tax and National Insurance. See what it does to your take-home — and how much more you keep than a normal pension.
England, Wales & NI. Compared with a relief-at-source (normal) pension of the same amount.
With salary sacrifice
2026/27- Gross salary
- £3,333
- Pension (salary sacrifice)
- −£333
- Income Tax
- −£391
- National Insurance
- −£156
Monthly take-home
£29,440 a year, plus the pension
£2,453
Salary sacrifice gives you £320 a year more than a normal pension — the National Insurance you save.
Verified · 2026/2721 June 2026
Why salary sacrifice beats a normal pension
Every pension contribution saves you Income Tax. Salary sacrifice does something extra: because you formally give up the salary, that pay is never subject to National Insurance either. A relief-at-source pension — the usual personal-pension route — gives you the tax relief but you still pay NI on the money first. The difference is the NI rate: 8% for most earners, 2% on pay above £50,270.
So sacrificing £100 of salary into your pension costs a basic-rate taxpayer about £68 of take-home, but puts the full £100 into the pension — and a higher-rate taxpayer keeps even more of the benefit. The trade-off is a lower gross salary, which lenders and some benefits look at, and you cannot sacrifice below the National Minimum Wage.
It is also the most effective way to escape the £100,000 tax trap or to soften a heavily taxed bonus. For your full pay picture, use the main take-home calculator.
Salary sacrifice questions
- What is salary sacrifice?
- You agree to give up part of your salary, and your employer pays it straight into your pension. Because that pay never lands in your hands, you pay no Income Tax and no National Insurance on it.
- How much does salary sacrifice save?
- On top of the usual tax relief, you save the National Insurance you would have paid on that pay — 8% for most earners, 2% above £50,270. That is the bit a normal (relief-at-source) pension does not give you.
- Are there downsides?
- It lowers your gross salary, which can affect mortgage applications, some benefits, and statutory pay. Your salary cannot be sacrificed below the National Minimum Wage.
- Is there a limit?
- Pension contributions are limited by your annual allowance. From 2029/30 the National Insurance saving on salary sacrifice is due to be capped (announced at the Autumn Budget 2025) — it does not affect 2026/27.