Salary sacrifice pension calculator
Calculate how salary sacrifice pension contributions affect your take-home pay, tax, and national insurance, then compare the result with other pension types.
Other settings
Other settings
Results
| Pay item | Relief at source | Net pay | Salary sacrifice |
|---|---|---|---|
| Employee payEmployee pay | |||
| Gross payGross pay | £0 | £0 | £0 |
| Taxable payTaxable pay | £0 | £0 | £0 |
| Income taxIncome tax | £0 | £0 | £0 |
| National insuranceNI | £0 | £0 | £0 |
| Pension contributionEmployee pension | £0 | £0 | £0 |
| Take-home payTake-home pay | £0 | £0 | £0 |
| Tax and NI savedTax/NI saved | |||
| Tax and NI saved through payrollPayroll saving | £0 | £0 | £0 |
| Basic rate tax relief inside pensionPension uplift | £0 | £0 | £0 |
| Higher rate tax saving to claimHigher-rate claimi | £0 | £0 | £0 |
| Total tax and NI savedTotal tax/NI saved | £0 | £0 | £0 |
| Annual pension savingsPension pot | |||
| Employee pension contributionEmployee conts | £0 | £0 | £0 |
| Relief at source uplift inside pensionPension uplift | £0 | £0 | £0 |
| Employer pension contributionEmployer conts | £0 | £0 | £0 |
| Total annual pension savingsTotal pension saved | £0 | £0 | £0 |
How to use the salary sacrifice pension calculator
Enter annual salary, employee pension contribution, employer pension contribution, and how much employer national insurance saving is shared. The calculator compares relief at source, net pay, and salary sacrifice side by side.
Steps
- Enter annual salary before tax.
- Set the employee pension contribution as a percentage of pay or a fixed annual amount.
- Set the employer pension contribution as a percentage of salary or a fixed annual amount.
- Enter the percentage of the employer national insurance saving that the employer adds to the salary sacrifice pension.
- Use other settings for tax year, region, student loan, tax code, benefits in kind, and other settings.
Input notes
- Annual salary
- Use gross annual pay before payroll deductions and before any pension salary sacrifice.
- Employee pension contribution
- Use the contribution the employee gives up or pays. Percentage mode uses qualifying earnings between the annual lower and upper limits by default, or full salary when Use qualifying earnings is set to No.
- Employer pension contribution
- Use the regular employer contribution before any employer national insurance saving is shared. Percentage mode uses the same qualifying earnings setting as the employee contribution.
- Use qualifying earnings
- Choose yes if percentage contributions should be based on qualifying earnings between the lower and upper limits. Choose no if the employee and employer percentages should be applied to full salary.
- Employer NI saving passed on
- Salary sacrifice can reduce employer national insurance. This setting controls how much of that saving is added to the employer pension contribution.
- Tax year
- The default setting is the current 2026/27 tax year but you can change this to see the results for the previous two years. Tax bands, allowances, and national insurance thresholds can change by tax year, so check this setting if you want accurate figures for a previous year.
- Scottish residence
- Choose yes if Scottish income tax rates apply to your employment income. Scotland has different income tax rates and thresholds than the rest of the UK so make sure to select this option for accurate results if you are a Scottish tax payer.
- State pension age
- People over State Pension age usually stop paying employee national insurance. Select this option to remove employee national insurance from the estimate.
- Student loan
- Choose yes if student loan or postgraduate loan repayments should be included in the take-home pay calculation.
- Student loan plan
- Plan 1, Plan 2, Plan 4, Plan 5 and postgraduate loans use different thresholds and repayment rates. Select every plan that applies.
- Tax code
- Enter a PAYE tax code such as 1257L, S1257L, BR, D0, D1, 0T or a K-code. The calculator applies recognised allowance and rate instructions.
- Blind persons allowance
- Select this if blind person's allowance applies. The allowance of £3,250 (for 2026/27) is added on to the basic personal allowance.
- Benefits in kind
- Enter the taxable value of benefits in kind received e.g. a company car or private medical insurance. Do not use this if you have already entered a tax code that accounts for the benefit.
- Other deductions before tax
- Use this for deductions that reduce taxable pay before income tax is calculated, such as some payroll benefit arrangements.
- Other deductions after tax
- Use this for deductions taken after tax and national insurance, such as repayments or workplace deductions. These reduce the final take-home pay shown.
What the results mean
- Tax and NI saved shows the amount of tax savings the salary sacrifice pension achieves compared to making no pension contributions.
- The full results table shows tax and national insurance saved through payroll, basic rate tax relief added inside the pension for relief at source, and any higher rate tax saving that may need to be claimed separately.
- Total benefit combines the salary sacrifice tax savings with any employer national insurance saving passed on.
- Annual pension savings is the total salary sacrifice pension saved, including employee pension, employer pension, and any shared employer national insurance saving.
- Employer national insurance saving only appears when the employer shares it as an extra pension contribution.
Common questions
Why compare salary sacrifice with net pay?
Both usually reduce taxable pay, but salary sacrifice can also reduce employee and employer national insurance, so it can improve take-home pay and increase total pension savings if your employer passes on their NI savings.
Is employer national insurance saving always shared?
No. Some employers keep the saving, some share part of it, and some add all of it to pension contributions. Use the sharing percentage to match the employer's policy.
Why is relief at source different?
Relief at source contributions are from after-tax pay but the amount deducted from your payslip is reduced by 20%. The government then pays this 20% straight into your pension. This means that higher or additional rate tax payers may need to claim the additional relief separately.
What does employer NI saving passed on mean?
Salary sacrifice can reduce the national insurance your employer pays. Some employers keep that saving, while others add some or all of it to your pension. If your employer does not say they pass this saving on, use 0%.
Is salary sacrifice always better than relief at source or net pay?
Not always. Salary sacrifice can be more efficient for tax and national insurance, but it reduces your contractual salary. This can affect things such as mortgage applications, salary-linked benefits, life cover, statutory pay, or bonus calculations depending on how your employer handles them.
Why is there a higher-rate tax saving to claim?
With relief at source, the pension provider adds basic-rate tax relief only. If you pay higher or additional rate tax, you may be able to claim the extra tax relief from HMRC. The calculator shows an estimate of that extra amount.
Should I use qualifying earnings or full salary?
Use qualifying earnings if your pension percentage is applied only to the part of your pay within the qualifying earnings band. Choose full salary if your employer applies the percentage to your whole salary or pensionable pay. Your payslip or pension scheme documents should say which basis is used.
Does salary sacrifice affect student loan repayments?
It can. Salary sacrifice reduces the pay used for payroll deductions, so student loan repayments may fall if your post-sacrifice pay is lower. The calculator estimates this using annual student loan thresholds.
Does salary sacrifice affect state pension or benefits?
Salary sacrifice can reduce earnings used for some contribution or benefit calculations. Most people earning comfortably above national insurance thresholds will still build state pension entitlement, but very low earnings or large sacrifices can matter. Check your employer's scheme rules if this is a concern.
Assumptions
- Employee national insurance is estimated for a standard category A employee unless the state pension age setting is selected.
- Employee and employer percentage contributions use the qualifying earnings band method by default, but you can switch the main inputs to apply percentages to full salary instead.
- Net pay pension contributions reduce taxable pay but do not reduce employee or employer national insurance.
- Salary sacrifice pension contributions reduce taxable pay, employee national insurance, and employer national insurance.
- Any percentage of employer national insurance saving shared is treated as an extra employer pension contribution in the salary sacrifice column.
- Fixed pound pension contributions are treated as annual amounts and are not re-based onto qualifying earnings.
Source notes
- GOV.UK Income Tax rates and Personal AllowancesPersonal allowance and income tax band rules.
- GOV.UK National Insurance: how much you payEmployee Class 1 National Insurance rates.
- GOV.UK rates and thresholds for employersEmployer Class 1 National Insurance thresholds and rates.
- GOV.UK Tax on your private pension contributionsOverview of pension tax relief methods.
- GOV.UK automatic enrolment earnings trigger and qualifying earnings bandQualifying earnings band used by default for workplace pension percentage contributions.