Salary Sacrifice Calculator UK 2026-27
Every £1 in your pension costs less than you think — sometimes much less.
See exactly what pension salary sacrifice costs your take-home at 2026-27 rates: tax, both NI savings, student loan effects and the £100k taper — where £1 invested costs just 38p. Includes the employer NI pass-through most calculators ignore.
2026-27 rates. Sacrifice can't take pay below the National Minimum Wage.
A contractual pay cut that beats every other pension route
Why it saves more than tax relief alone
You agree to a lower salary and your employer pays the difference straight into your pension. Because the sacrificed pay never reaches you, it escapes income tax and National Insurance — the NI saving (8% at basic rate) is what ordinary relief-at-source contributions miss entirely.
Worked example
£200 a month sacrificed at a £45,000 salary: £40 tax + £16 NI saved = the £200 pension contribution costs just £144 of take-home. Over a year, £2,400 invested for £1,728 of net cost — before any employer NI pass-through or investment growth.
The cost-per-pound table for 2026-27
| Income band | Saved per £1 | £1 of pension costs |
|---|---|---|
| £12,570 – £50,270 (basic) | 20% + 8% NI = 28% | 72p |
| £50,270 – £100,000 (higher) | 40% + 2% NI = 42% | 58p |
| £100,000 – £125,140 (taper) | 60% + 2% NI = 62% | ~38p |
| £125,140+ (additional) | 45% + 2% NI = 47% | 53p |
The taper zone is the standout: the personal allowance clawback means each sacrificed £1 recovers 60p of tax — and a sacrifice that brings taxable pay back to £100,000 also restores tax-free childcare and the free hours. Add a student loan and every band improves by another 9p.
Free money on the table
Your employer pays 15% National Insurance on your salary — but not on sacrificed pay. Every £2,400 you sacrifice saves them £360 a year, at no cost to you or them. Progressive employers pass some or all of that into your pension: at "all passed on", your £2,400 sacrifice lands as £2,760 invested.
If your scheme doesn't mention it, ask HR — framing it as "cost-neutral for the company" usually works. Even half the saving is a 7.5% instant top-up on everything you sacrifice.
When sacrifice needs care
The NMW floor: sacrifice legally cannot take hourly pay below the National Minimum Wage — lower earners should use relief-at-source instead. Statutory pay: SMP, SSP and redundancy calculations use the post-sacrifice salary; heavy sacrifice just before parental leave costs real money. Mortgage applications: lenders see the lower contractual salary (though many accept the pension as explainable). Access: pension money is locked until at least age 57. The £60,000 annual allowance covers all contributions including your employer's — carry-forward from three prior years absorbs big one-offs.
❓ Frequently asked Frequently asked questions
How much does salary sacrifice save?
28% at basic rate (20% tax + 8% NI), 42% at higher rate, ~62% in the £100k taper. £1 of pension costs 72p, 58p or ~38p of take-home respectively.
What does my employer save?
15% employer NI on every sacrificed pound — £360 a year on £2,400. Many pass some or all into your pension; it costs them nothing to do so.
Does it reduce student loan repayments?
Yes — repayments follow post-sacrifice pay, adding 9% (6% postgraduate) to the saving.
What are the downsides?
Statutory payments and mortgage affordability use the lower salary, pay can't cross the NMW floor, and the money is locked until at least 57.
Why is the taper relief 62%?
In the £100k–£125,140 zone each £1 costs 40p tax + 20p of personal-allowance clawback + 2p NI. Sacrifice reverses all three — and restores childcare eligibility at £100,000.
Is there a contribution limit?
The £60,000 annual allowance covers all pension inputs including employer contributions, with three years' carry-forward. Very high earners see it tapered to £10,000.
Where these figures come from
Rates and rules come from HMRC and GOV.UK — the sources of record.
- Salary sacrifice for employers — GOV.UK — Salary sacrifice and PAYE.
- National Insurance rates — GOV.UK — NI rates.
- Pension annual allowance — GOV.UK — Annual allowance.
- Income tax rates — GOV.UK — Income Tax rates.
Last checked: July 2026. Taper-zone relief reflects the moving higher-rate threshold (personal allowance + £37,700).
Select the question that matches where you are right now.
Your result is the honest monthly cost of the pension contribution — after every saving the sacrifice unlocks — and the uplift ratio that shows the deal you're getting.
If the uplift reads ×1.4 or better, you're being paid to save. Set the sacrifice at the level whose take-home cost your budget can genuinely absorb.
Not investment advice, and not accessible money — contributions lock until at least 57. Emergency fund first.
2026-27 rates with the correct moving higher-rate threshold in the taper. All calculations run in your browser.
Your marginal band sets the deal; three multipliers can improve it.
72p, 58p, 53p or 38p per £1 — the same contribution is nearly twice as cheap in the taper zone as at basic rate.
All-passed-on turns £1 of sacrifice into £1.15 of pension before your own savings even start.
A Plan 2 basic-rate graduate saves 37p per £1; with a postgraduate loan too, 43p. The loan balance shrinks slower — usually irrelevant given 30-year write-offs.
Squeeze the structure before adding pounds.
The single highest-value email you can send HR — a 7.5–15% instant top-up on everything you sacrifice.
Sacrifices that cross £100,000 (childcare, allowance) or £50,270 (HICBC for parents) earn outsized relief.
Many schemes allow one-off bonus sacrifice — the same rates apply, and it never hits your bank account to get spent.
The sacrifice decision sits between your payslip and your retirement.