Salary Sacrifice Pension Calculator
What paying into your pension by salary sacrifice really costs your take-home pay in 2026/27, after the income tax and National Insurance it saves.
Result
Cost to your take-home pay: £2,900.00Estimate
From April 2029 only the first £2,000 a year sacrificed will be free of National Insurance. Income tax relief is unchanged.
- Income tax saved
- £2,000.00Estimate
- Your National Insurance saved
- £100.00Estimate
- Employer National Insurance saved
- £750.00Estimate
- Going into your pension
- £5,000.00Estimate
- Take-home cost of each £1 into the pension
- 0.58Estimate
https://calcgallery.com/retirement-planning/salary-sacrifice-pension-calculator/
Results are arithmetic on the returns, rates and horizons you enter, not a forecast and not investment, tax or retirement advice. The site supplies no expected return, inflation rate, contribution limit, tax rate or withdrawal rate. Real returns vary from year to year, and fees, taxes and the order of returns all change the outcome. Check anything that matters with a qualified adviser. Read the full disclaimer
How to use the Salary Sacrifice Pension Calculator
- Enter your salary before the sacrifice and how much you would give up into your pension in the year.
- Pick where you live, since Scottish income tax bands differ.
- Say whether your employer adds its own National Insurance saving to your pension. Ask HR if you are unsure.
- Read how much your take-home pay falls and how much goes into your pension.
The real cost of a contribution
The page works out your take-home pay twice, with and without the sacrifice, using the same 2026/27 income tax and National Insurance rules as the UK income tax calculator. The difference is what the pension contribution really costs you.
cost to you = sacrifice − income tax saved − your NI savedinto pension = sacrifice (+ employer's NI saving, if passed on)cost per £1 = cost to you ÷ into pensionBecause both runs use the full rules, the allowance taper, band edges and Scottish rates all come out correctly.
With your numbers
- Take-home pay is worked out with and without the sacrifice; the difference is the real cost
Quick reference
From April 2029 only the first £2,000 a year sacrificed will be free of National Insurance. Income tax relief is unchanged.
| Example | Cost to your take-home pay |
|---|---|
| £60,000, £5,000 sacrifice | £2,900.00 |
| £40,000, £2,000 sacrifice | £1,440.00 |
| £110,000, £10,000 sacrifice | £3,800.00 |
| £60,000, employer passes on NI | £2,900.00 |
| £60,000 in Scotland | £2,800.00 |
| £25,000, £1,250 sacrifice | £900.00 |
Where the numbers come from
The fixed figures this calculator relies on, and the published source each one was checked against. How the calculators are built and checked
15 sources
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: "£12,570 per year"
Used for
- Personal allowance.
HMRC, Income Tax rates and allowances, https://www.gov.uk/government/publications/rates-and-allowances-income-tax/income-tax-rates-and-allowances-current-and-past: "goes down by £1 for every £2 of income above the £100,000 limit"
Used for
- Income above which the personal allowance falls by £1 for every £2.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: basic rate "Up to £37,700"
Used for
- England, Wales and NI: taxable income above this is taxed at the higher rate.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: "Above £125,140"
Used for
- Taxable income above this is taxed at the additional (or Scottish top) rate.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027
Used for
- Basic rate of income tax.
- Higher rate of income tax (England, Wales, NI).
- Additional rate of income tax (England, Wales, NI).
- Employer NI secondary threshold, a year.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027; Scottish Government, Scottish income tax rates and bands 2026 to 2027, https://www.gov.scot/publications/scottish-income-tax-rates-and-bands/pages/2026-to-2027/: starter "Up to £3,967"
Used for
- Scotland: taxable income above this leaves the starter rate.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027; Scottish Government, Scottish income tax rates and bands 2026 to 2027, https://www.gov.scot/publications/scottish-income-tax-rates-and-bands/pages/2026-to-2027/: basic "From £3,968 to £16,956"
Used for
- Scotland: intermediate rate starts above this taxable income.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027; Scottish Government, Scottish income tax rates and bands 2026 to 2027, https://www.gov.scot/publications/scottish-income-tax-rates-and-bands/pages/2026-to-2027/: intermediate "From £16,957 to £31,092"
Used for
- Scotland: higher rate starts above this taxable income.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027; Scottish Government, Scottish income tax rates and bands 2026 to 2027, https://www.gov.scot/publications/scottish-income-tax-rates-and-bands/pages/2026-to-2027/: higher "From £31,093 to £62,430"
Used for
- Scotland: advanced rate starts above this taxable income.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027; Scottish Government, Scottish income tax rates and bands 2026 to 2027, https://www.gov.scot/publications/scottish-income-tax-rates-and-bands/pages/2026-to-2027/
Used for
- Scotland: starter rate.
- Scotland: intermediate rate.
- Scotland: higher rate.
- Scotland: advanced rate.
- Scotland: top rate.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: "£242 per week / £1,048 per month / £12,570 per year"
Used for
- Employee National Insurance starts above this, a year.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: "£967 per week / £4,189 per month / £50,270 per year"
Used for
- Upper earnings limit for employee National Insurance, a year.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: "8% between primary and upper earnings limits"
Used for
- Employee Class 1 NI between the primary threshold and the upper earnings limit.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: "2% above"
Used for
- Employee Class 1 NI above the upper earnings limit.
HMRC, Rates and thresholds for employers 2026 to 2027, https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: "15% above secondary threshold"
Used for
- Employer Class 1 NI above the secondary threshold.
Common questions about the Salary Sacrifice Pension Calculator
- How does salary sacrifice save tax?
- You agree to a lower salary and your employer pays the difference into your pension. Because the salary is never paid to you, no income tax or National Insurance is due on it. Your employer also saves its 15% National Insurance on that pay, and some add that saving to your pension.
- How much does £1 into my pension cost?
- A basic-rate taxpayer saves 20% income tax and 8% National Insurance, so £1 into the pension costs 72p of take-home pay. A higher-rate taxpayer saves 40% and 2%, so it costs 58p. Between £100,000 and £125,140 the tax saving is 60%, because the sacrifice also restores your personal allowance.
- What changes in April 2029?
- From April 2029 only the first £2,000 a year sacrificed into a pension will be free of National Insurance, for both you and your employer. Income tax relief stays as it is. Contributions above £2,000 will save less than they do now.
- Are there downsides?
- A lower contractual salary can reduce statutory pay worked out from earnings, such as maternity pay, and the income lenders see on your payslip. Your salary must not fall below the National Minimum Wage after the sacrifice.