Salary sacrifice pension calculator 2026/27
Salary sacrifice cuts your pay before tax, NI and student loan. Here's what £1 into your pension actually costs you.
Things to know
- Your pay after sacrifice can't fall below the National Living Wage (£12.71 an hour from April 2026 for 21+).
- A lower salary can affect mortgage applications, life cover based on salary, and statutory pay such as maternity pay. Check with your employer.
- Sacrificing to get your adjusted net income under £100,000 recovers your Personal Allowance. Under £60,000, it reduces the High Income Child Benefit Charge.
- Coming in April 2029: NI relief on salary sacrifice will be capped at £2,000 a year. Income tax relief carries on as now.
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FAQs
Is salary sacrifice worth it?
For most employees, yes. You save income tax and National Insurance on the amount sacrificed (and student loan repayments too), so every £1 in your pension costs a basic-rate taxpayer about 72p of take-home pay, or less if you repay a student loan.
What's the difference between salary sacrifice and relief at source?
With relief at source, your contribution comes from taxed pay and the pension provider adds 20% basic-rate tax relief. You don't save National Insurance. Salary sacrifice saves NI as well.
Related calculators & guides
Child Benefit charge (HICBC) · Marriage Allowance · Tax-Free Childcare · Take-home pay · 50/30/20 budget · Savings goal · No-spend challenge · Universal Credit
Handy for this
- Undated monthly budget planner book (Amazon)
- Cash-stuffing budget envelope wallet (Amazon)
- The Psychology of Money: Morgan Housel (Amazon)
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