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Pension calculator

Salary Sacrifice Pension Calculator

Sacrifice part of your salary into your pension and you cut your income tax and National Insurance at the same time. See exactly what leaves your take-home pay, and how much more lands in your pension.

Free, no signup2025-26 & 2026-27 ratesEngland, Wales & NI
Your salary
Your full salary before any sacrifice
£
What you sacrifice
%
Only some employers add their 15% NI saving to your pension. Check your scheme.
From April 2029, the National Insurance saving on sacrifice above £2,000 a year will be removed. It doesn’t affect 2025-26 or 2026-27.
Every £1 in your pension costs you
£0.72
£5,000 goes into your pension, but your take-home only drops by £3,600.
Take-home now£3,293/mo£39,520/yr
Take-home after sacrifice£2,993/mo£35,920/yr
Income tax saved£1,000
National Insurance saved£400
Total into your pension£5,000
Estimate for England, Wales & Northern Ireland, 2025-26 / 2026-27 rates. Scotland has different income tax bands. General information, not financial advice. Your salary can’t be sacrificed below the National Minimum Wage.
Simon Chadwick
Simon Chadwick
Founder, Orbit Money
Method: gov.uk income tax & National Insurance ratesUpdated: 13 July 2026Sources: gov.uk income tax, gov.uk NI rates

How salary sacrifice works

With salary sacrifice you agree to a lower gross salary, and your employer pays the difference straight into your pension. Because your headline salary is genuinely reduced, both your income tax and your National Insurance are worked out on the smaller figure. The full sacrificed amount lands in your pension with no tax or NI taken off, so unlike a normal contribution there’s nothing to claim back.

That NI saving is what makes salary sacrifice more efficient than paying into a pension the usual way. A standard contribution recovers income tax but not National Insurance. Sacrifice recovers both, which is why the “true cost” of each pound in your pension is often around 52p to 72p of take-home pay.

The sweet spot: £100,000 to £125,140

If your income sits between £100,000 and £125,140, your personal allowance is being withdrawn at £1 for every £2 you earn, creating an effective marginal rate of around 60%. Sacrificing salary back below £100,000 can restore your allowance, so each pound sacrificed in this band saves an unusually large amount of tax. The calculator captures this automatically.

Frequently asked questions

Is salary sacrifice worth it for pensions?
Usually yes. You avoid income tax and National Insurance on the sacrificed amount, so £100 into your pension costs most people between £58 and £72 of take-home pay. It's one of the most tax-efficient ways to save for retirement.
How much can I salary sacrifice into my pension?
There's no legal limit on the sacrifice itself, but your salary can't drop below the National Minimum Wage. Tax relief is limited by the annual allowance (£60,000 for most people in 2025-26 and 2026-27), and from April 2029 the National Insurance saving will be capped at £2,000 a year.
Does salary sacrifice affect my mortgage or benefits?
It can. Lenders assess your reduced gross salary, so borrowing capacity may fall. It can also lower earnings-linked benefits such as statutory maternity pay, redundancy pay and life cover if these are based on your new lower salary. Check before sacrificing a large amount.
How much tax will I save with salary sacrifice?
You save income tax at your marginal rate (20%, 40% or 45%) plus employee National Insurance (8% below £50,270, 2% above) on everything you sacrifice. A higher-rate taxpayer earning under £50,270 who sacrifices £100 keeps roughly £52 in take-home terms while £100 goes into their pension.
Is salary sacrifice better than paying into a pension the normal way?
Generally yes, because you also save National Insurance, which normal pension contributions (relief-at-source or net pay) don't recover. The catch is the lower headline salary, which can affect mortgages and some benefits.

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Simon Chadwick
About the author
Simon Chadwick
Founder of Orbit Money

Simon is the founder of Orbit Money, a tool that helps people track subscriptions and recurring spend. He builds Orbit's free money calculators and writes about personal finance for UK and Australian readers.

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Covers England, Wales & Northern Ireland. General information, not financial advice.