Pension Salary Sacrifice Calculator
Pension salary sacrifice gives up part of your gross pay in exchange for additional employer pension contributions. Both you and your employer save NI; you also save Income Tax. £40k salary, £2k sacrifice = £400 tax saving + £160 NI saving = ~£560/year saved.
UK pension salary sacrifice calculator. See how much you and your employer save in tax and NI by sacrificing salary into pension, and the resulting total pension contribution.
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What this calculator does
Calculates the take-home, Income Tax, employee NI and employer NI impact of pension salary sacrifice, with optional employer NI sharing into the pension pot.
Who it is for
UK employees considering pension salary sacrifice, HR/payroll teams, and pension advisers explaining the trade-off.
How to use it
Enter your gross salary, sacrifice amount (annual £, monthly £ or % of salary), region, employer NI sharing rate, weekly hours and age band.
How the calculation works
Pension contribution reduces gross salary. Income Tax and employee NI are recomputed on the lower salary using 2026/27 EW/NI bands. Employer NI is computed both before and after; if employer NI sharing > 0, that share is added to pension contribution.
Worked example
£40k salary, 5% (£2,000) sacrifice: salary becomes £38,000; tax falls by £400; employee NI by £160; employer NI by £300; total pension contribution £2,000 (or £2,300 with 100% employer NI share).
Assumptions and limitations
- 2026/27 tax year only
- EW/NI bands — Scotland not yet supported
- Does not model auto-enrolment minima or annual allowance taper
- Estimates only — not financial advice
Frequently asked questions
Is pension salary sacrifice better than personal contributions?
For most UK basic and higher-rate taxpayers, yes — pension salary sacrifice saves employer NI as well, which is often passed into your pension.
Does it affect pensionable pay?
Most modern schemes recognise sacrifice and base pension and benefits on a notional pre-sacrifice salary.
Will the April 2029 rule change affect me?
From April 2029, employer NI relief on sacrificed pension above £2,000/year is set to end. This calculator does not apply that future change.
Does it affect mortgage applications?
Some lenders use post-sacrifice salary, which can reduce affordability. Ask your lender first.
What if my salary goes below the personal allowance?
The Income Tax saving disappears below £12,570 — only NI is saved.
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Sources and references
GOV.UK Income Tax rates 2026/27; GOV.UK NI thresholds 2026-2027; GOV.UK Salary sacrifice for employers; GOV.UK Pension salary sacrifice changes April 2029.
Last updated
Last reviewed: 2026-05-21.