Salary Sacrifice Calculator UK
Calculate how much income tax and National Insurance you save with salary sacrifice into a pension or other scheme. See how a contribution costs you less in take-home pay than the amount that goes in.
Calculator
What this means
Salary sacrifice swaps part of your gross salary for a benefit such as pension contributions. Because the swap happens before tax and National Insurance, you save both — so the real cost to your take-home pay is less than the amount you contribute.
How to use this calculator
- Enter your salary and the amount you want to sacrifice.
- Choose the benefit (pension, electric car or cycle-to-work).
- See your new take-home pay and the tax and NI you save.
Worked example
You earn £45,000 and sacrifice £200 a month into your pension.
- The £2,400 a year comes out before tax and National Insurance.
- You save 20% income tax and 8% NI on that amount.
Your pension gains £2,400 a year while your take-home falls by less, thanks to the tax and NI saving.
Who this is for
- Employees offered pension, EV or cycle-to-work schemes.
- People near a tax threshold wanting to reduce taxable pay.
- Anyone comparing sacrifice with ordinary contributions.
Why salary sacrifice can beat ordinary contributions
Salary sacrifice means giving up part of your gross salary in exchange for a benefit. Because the money never counts as pay, you save both income tax and National Insurance on it — and some employers pass on their NI saving too.
It can also reduce your adjusted net income, which helps if you're near the £100,000 personal allowance taper or the £60,000 High Income Child Benefit Charge. Sacrificing too much can affect mortgage affordability or take pay below the minimum wage, so check the trade-offs.
Frequently asked questions
You give up part of your gross salary before income tax and National Insurance are calculated, so you pay less of both. A basic-rate taxpayer typically saves 28% (20% tax + 8% NI) on the sacrificed amount.
A lower gross salary can reduce mortgage borrowing, statutory maternity or sick pay and some benefits. You also can't sacrifice below the National Minimum Wage.
Yes. Common schemes include electric car leasing, cycle-to-work and additional pension contributions. The tax treatment varies, so check how each scheme works.
It can. A lower gross salary may reduce how much you can borrow and could affect earnings-related benefits or statutory pay, so weigh it up before committing.
Your salary can't drop below the National Minimum Wage, and pension contributions remain subject to the annual allowance. Employers set their own scheme rules.
Disclaimer
This calculator provides estimates for guidance only. It is not financial, legal or tax advice. Always check official sources or speak to a qualified professional before making decisions.
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