Salary Sacrifice

Salary sacrifice pension calculator — what it costs your take-home pay.

Pension salary sacrifice — 2026/27

Your pay and sacrifice

Your salary after sacrifice must stay above the National Minimum Wage. From April 2029 the NI saving is due to be capped at £2,000 of sacrifice a year; Income Tax relief is unaffected.

Into your pension

£3,000

Costs you £1,849 in take-home pay — £1,151 less than the amount sacrificed.

Take-home before
£35,524
Take-home after
£33,675
Pension per £1 given up
£1.62
Employer NI saved £450

Where the pension contribution comes from

Rates and rules from Tax on your private pension: pension tax relief (HM Revenue & Customs) and Rates and thresholds for employers 2026 to 2027 (HM Revenue & Customs).

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Questions

Frequently asked
questions.

Is salary sacrifice worth it?

For most employees it is the cheapest way to pay into a pension, because the contribution escapes National Insurance as well as Income Tax. It is especially valuable inside the £100,000 taper or the Child Benefit charge band.

Is anything changing with salary sacrifice?

The Autumn Budget 2025 announced that from April 2029 the National Insurance saving on pension salary sacrifice will be capped at £2,000 of sacrificed pay a year. Income Tax relief is unaffected.

Can salary sacrifice affect other things?

A lower contractual salary can reduce statutory maternity pay, mortgage affordability and some life cover multiples, and pay after sacrifice must stay above the National Minimum Wage.

What happens to my employer's NI saving?

Your employer saves 15% NI on the sacrificed amount. Some pass all or part of it into your pension; others keep it. Ask HR which applies.

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