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Salary Sacrifice Pension Calculator

Enter your salary and how much of it you want to send to your pension, as a percentage or in pounds. You will see the amount both ways, the Income Tax and National Insurance you save, and what it really costs your take-home pay.

Your pay details

Your salary before tax and before any pension contribution. Daily figures use 260 working days a year.

Your contribution

Most employers ask for a percentage. Use whichever you know and the result shows both.
Enter a percentage (for example 5) or a yearly amount in pounds (for example 2400) to match your choice above. Over 100% counts as 100%. An amount above your salary counts as your salary.

Deductions

Choose your repayment plan if you have one. Repayments are based on your pay after the salary sacrifice, so they fall. Plan 5 repayments began on 6 April 2026. Selecting Plan 5 for 2024/25 or 2025/26 will show £0 repayment.

This is an estimate, compared with paying nothing into a pension. Your payslip may differ because payroll uses pay-period thresholds, tax codes and rounding, and your employer sets the terms of any salary sacrifice scheme.

National Minimum Wage check

A salary sacrifice must not take your pay below the National Minimum Wage. This calculator does not ask for your hours or age, so it assumes you are 21 or over and work 37.5 hours a week. At £12.71 an hour, that is about £24,784.50 a year. Part-time workers should check their own hourly pay.

What a salary sacrifice can affect

A lower salary can matter outside your payslip. This is general information, not advice.

  • Student loan: if you have one, repayments are based on your pay after the salary sacrifice, so they are lower. Choose your plan above to see the figure.
  • Mortgages: lenders may use your lower salary when they work out how much you can borrow. Policies vary.
  • Statutory pay: statutory sick, maternity and paternity pay depend on your earnings reaching the Lower Earnings Limit (£6,708 a year for 2026/27) and on other conditions. The amounts may be based on your lower pay. After this contribution your pay is £48,000.00, which is above that limit.
  • Universal Credit and other means-tested benefits: these look at your income, so a lower salary can change what you get. The effect depends on the benefit and your circumstances.
  • National Insurance record and State Pension: less of your pay is charged National Insurance, which GOV.UK says may affect contribution-based benefits such as the State Pension.
  • Life cover and other benefits: some employers base these on salary, so they could be based on the lower figure. Check your employer's scheme rules.
  • Child Benefit: the High Income Child Benefit Charge is based on adjusted net income, which a pension contribution through salary sacrifice reduces. It can matter if you or your partner get Child Benefit.

A planned change from April 2029

From April 2029, National Insurance is due to apply to salary sacrifice pension contributions above £2,000 a year, for both employees and employers. Income Tax relief is unchanged. This does not affect any tax year in this calculator.

Questions

Frequently asked questions

What is a salary sacrifice pension contribution?
It is an agreement with your employer to take a lower salary, with your employer paying that amount into your pension instead. Because your pay is lower, Income Tax and employee National Insurance are worked out on the lower figure.
How does this calculator work out the cost?
It works out your take-home pay without the contribution, then with it, and shows the difference. What is left after the tax, National Insurance and student loan repayments you save is what the contribution really costs you.
Why does £100 into my pension not cost me £100?
Because you stop paying Income Tax and employee National Insurance on that £100. The calculator shows what the contribution really costs you after those savings, and after any student loan repayments you save.
Should I enter a percentage or an amount in pounds?
Whichever you know. Most employers ask for a percentage of salary. Enter either one and the result shows the amount both ways.
Does salary sacrifice change my student loan repayments?
Yes. Student loan repayments are based on the same earnings as employer National Insurance, which for a salary sacrifice means your lower pay. Choose your plan in the calculator to see the difference.
Can a salary sacrifice take my pay below the National Minimum Wage?
No. A salary sacrifice must not reduce your cash pay below the National Minimum Wage. This calculator does not ask for your hours or age, so it assumes you are 21 or over and work 37.5 hours a week, and warns if the contribution would take that full-time pay below the minimum. Part-time workers should check their own hourly pay.
What does my employer save?
Your employer does not pay employer National Insurance on the part of your pay that goes into your pension, so it may save about 15% of your contribution (the rate for 2026/27). This is shown separately and is not part of your take-home pay. Some employers put part or all of it into your pension and some keep it, so check with your employer.
Is the National Insurance advantage changing?
From April 2029, National Insurance is due to apply to salary sacrifice pension contributions above £2,000 a year, for both employees and employers. Income Tax relief is unchanged. It does not affect the figures for 2026/27, 2025/26 or 2024/25 in this calculator.
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Version 1.0.0

This calculator provides annual estimates for general information only. It is not financial, tax, pension or payroll advice. Your employer sets the terms of any salary sacrifice scheme, and figures may differ from your payslip because of tax codes, benefits and payroll rounding.