Salary Sacrifice Calculator UK

It depends on your income and how much you sacrifice, because Income Tax and National Insurance are charged in bands. As a rough guide, a basic-rate taxpayer typically keeps around 70p of every £1 sacrificed as 'free', meaning take-home pay only falls by about 70% of the amount sacrificed, while a higher-rate taxpayer often loses less than 60p, because more of the saving comes from the 40% tax band and, for some income levels, a restored Personal Allowance. Enter your own numbers above for an exact estimate.

No. Because your contractual salary is lower, you pay less Income Tax and less employee National Insurance on it, so your take-home pay falls by less than the amount you sacrifice. The calculator above shows this as the 'effective cost' of the sacrifice.

Yes. Salary sacrifice lowers your contractual cash pay, and employee National Insurance is charged on that lower figure, so you pay less. Your employer also pays less employer National Insurance, which is one reason many employers support salary sacrifice pension schemes.

For pension salary sacrifice specifically, the amount you give up is paid into your pension by your employer instead of being paid to you as salary, so your total pension contribution is usually unaffected, and can even increase if your employer passes on some or all of their National Insurance saving. Check your scheme's rules, since not every employer does this.

Yes. Student loan repayments are calculated on your income above your plan's repayment threshold, and salary given up under a genuine sacrifice arrangement is not counted as income for this purpose, so your monthly student loan deduction falls too. This calculator models that effect if you select a student loan plan.

For pension contributions, salary sacrifice is usually worth considering because it reduces tax and National Insurance without reducing your pension contribution. It's less clear-cut for other benefits, since you're giving up guaranteed cash pay for something else of value, and a lower contractual salary can also affect mortgage applications, redundancy pay, and some state benefit calculations. This calculator estimates the tax and NI effect only; it isn't financial advice.

There's no single right answer. It depends on your budget, your pension goals, and how close your income is to a tax band boundary (such as £50,270 or £100,000) where sacrificing can have an outsized effect on your take-home pay. Try a few different amounts in the calculator above to compare.

The mechanics of salary sacrifice are the same across the UK, but Scotland has its own Income Tax bands and rates (six bands from 19% to 48%, instead of the three used in England, Wales and Northern Ireland), which changes how much tax you save. Select 'Scotland' as your tax region above for an accurate estimate.

Not yet. Company car and ultra-low-emission-vehicle salary sacrifice schemes are taxed differently: you pay Benefit-in-Kind tax on the car itself (based on its list price and CO2 emissions), rather than being taxed on the salary given up. That requires a different calculation, which isn't built into this tool yet. It currently covers pension contributions and similar 'fully exempt' benefits such as Cycle to Work and workplace nurseries.

From April 2029, the government plans to cap the National Insurance exemption on salary-sacrificed pension contributions at £2,000 a year, announced in the Autumn Budget 2025. Below £2,000 a year, sacrificed pension contributions will keep their full NI exemption; above that, the excess will be treated as normal earnings for National Insurance. This does not affect the 2026/27 tax year figures shown above.

No. By law, an employer cannot let a salary sacrifice arrangement reduce your cash pay below the National Minimum Wage or National Living Wage. If your sacrifice would do this, your employer must cap or refuse it. This calculator shows a warning if your adjusted salary looks low, but it can't check this precisely because it doesn't know your contracted hours.