Estimate how pension salary sacrifice changes take-home pay, tax, National Insurance, and the amount landing in your pension.
UK Salary Sacrifice Calculator
Estimate take-home impact when you give up gross salary for pension salary sacrifice. 2026/27-style frozen income-tax thresholds are used as an estimate.
Salary sacrifice reduces contractual taxable pay. This can reduce Income Tax, employee NI, and sometimes student loan deductions, but it must not reduce pay below minimum wage.
How salary sacrifice works
With salary sacrifice, you agree to give up part of your gross salary in exchange for an employer pension contribution. Because taxable pay is lower, the arrangement can reduce Income Tax and employee National Insurance. Some employers also share part of their employer NI saving.
Source note: GOV.UK explains that salary sacrifice arrangements must not reduce cash pay below the National Minimum Wage. Pension salary sacrifice rules are also changing from April 2029, so check current guidance before making long-term decisions.
Frequently asked questions
Is salary sacrifice the same as relief at source?
No. Salary sacrifice lowers contractual salary before tax. Relief at source takes contributions from net pay and adds basic-rate tax relief inside the pension.
Does salary sacrifice reduce student loan repayments?
It can, because payroll student loan deductions are based on taxable pay after sacrifice, but exact treatment depends on payroll setup and your plan.
Can everyone use salary sacrifice?
No. Your employer must offer it and it cannot reduce cash pay below the National Minimum Wage.
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