UK Salary Sacrifice Calculator
£1 sacrificed into pension typically costs ~58–72p in take-home pay, depending on your tax band — while delivering £1 into pension. The calculator shows the impact on take-home and total compensation.
Updated May 2026, using HMRC 2026/27 rates and current ONS / gov.uk figures.
Salary sacrifice swaps gross salary for an employer-provided benefit (pension contribution, EV, cycle-to-work, additional holiday). The sacrificed amount escapes income tax AND National Insurance — which is why it's more efficient than relief-at-source pension contributions for higher-rate payers and especially for those in the 60% trap.
Use the take-home calculator above with your post-sacrifice salary to see the net effect.
How it works. Sacrifice reduces gross salary before tax and NI. Net cost of sacrifice = your reduced take-home; pension gain = the full sacrificed amount. The ratio is your effective discount.
Worked examples
£60,000 + £5,000 to pension via sacrifice: take-home falls by ~£2,900, pension grows by £5,000. Net cost ratio: 58%.
£105,000 + £5,000 to pension via sacrifice (clears 60% trap): take-home falls by ~£1,900, pension grows by £5,000. Net cost ratio: 38%.
EV salary sacrifice on £30k EV at higher-rate payer: ~42% saving on monthly cost vs personal lease.
Sources:
HMRC Income Tax rates 2026/27 · HMRC NI rates 2026/27 · HMRC salary sacrifice guidance
· retrieved 2026-05-12.
Frequently asked questions
Why is salary sacrifice better than personal pension contributions?
Because it saves both income tax AND National Insurance. Personal pension contributions get tax relief but not NI. For a higher-rate payer, sacrifice saves an extra 2% NI on top of 40% tax.
Does my employer have to offer salary sacrifice?
No. It's optional. Many do offer pension and cycle-to-work; fewer offer EV. The employer also benefits because they save 15% Employer NIC on the sacrificed amount.
What's the limit?
Salary cannot be sacrificed below the National Minimum Wage. The annual pension allowance is £60,000 (2026/27); above that you may pay an annual allowance charge. The £100k taper threshold uses 'adjusted net income', which factors in pension.
Can I get sacrificed money back?
No — that's the trade-off. Pension money is locked until at least age 55 (rising to 57 from 2028). EV sacrifice is locked for the lease term.