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What The Salary Sacrifice Calculator Works Out
- Into your pension: the amount you give up in salary, which your employer pays into your pension as an employer contribution instead. Nothing is lost on the way in.
- Take-home pay falls by only: the sacrificed amount minus the income tax and employee National Insurance you no longer pay on it. A basic-rate earner giving up GBP 2,000 sees take-home fall by about GBP 1,440 (a 28% discount); a higher-rate earner's discount is 42%.
- Tax and NI saved: the difference between deductions on your full salary and on the reduced one, using 2026/27 England, Wales and Northern Ireland bands, shown as an effective relief rate. Around the GBP 100,000 personal allowance taper and the child benefit charge thresholds the effective rate can exceed 60%.
- Employer NI saving passed on (advanced): your employer saves 15% employer NI on the sacrificed amount too. Many schemes pass some or all of it into your pension; enter the percentage your scheme shares and the total going in is shown.
- Student loan deduction saved (advanced): student loan repayments are 9% (6% for postgraduate) of pay above the plan threshold, and sacrifice lowers that pay, so graduates get a further saving that cuts the real cost of the contribution.
- Advantage over a normal pension contribution (advanced): relief-at-source and net-pay contributions recover income tax but never employee NI. The card shows the NI you keep by using sacrifice instead: 8% of the amount below the GBP 50,270 upper earnings limit, 2% above it, every year.
- Pot after N years (advanced): the yearly contribution (including any employer top-up) repeated for your chosen years and grown at your assumed return. 5% a year is a common planning assumption after charges; 7% is optimistic.
- Pay after sacrifice per hour (advanced): your reduced salary divided by 52 weeks and your hours, checked against the GBP 12.71 National Living Wage. Sacrifice cannot legally take pay below the minimum, which caps how much lower earners can sacrifice.
- Caveats: the lower contractual salary is what mortgage lenders, statutory maternity pay and salary-multiple life cover see (many employers use a reference salary for benefits), the money is locked until the normal minimum pension age, and the employer must offer the scheme because it is a contract change. Not financial advice.
Source and further reading: GOV.UK (HMRC): salary sacrifice.