Salary Sacrifice Calculator UK 2026/27

Calculate how much tax and National Insurance you save through salary sacrifice for pension contributions or the cycle to work scheme. See your real net cost and take-home change.

Monthly Tax + NI Saving
£0
Annual saving: £0
Annual Income Tax Saving
£0
Annual NI Saving (Employee)
£0
Net Annual Cost of Sacrifice
£0
Total Pension Contribution (annual)
£0
Monthly Take-Home Before
£0
Monthly Take-Home After
£0
To put £100 into your pension, it costs you:
£0
The rest is funded by your tax and NI saving.
Before vs After Salary Sacrifice
Item Before Sacrifice After Sacrifice Change
Gross Salary (taxable) £0 £0 £0
Income Tax (annual) £0 £0 £0
Employee NI (annual) £0 £0 £0
Take-Home Pay (annual) £0 £0 £0
Enter your salary and sacrifice amounts to see your savings.
How Salary Sacrifice Works

With salary sacrifice, you agree with your employer to give up part of your gross salary in exchange for a non-cash benefit (such as a pension contribution or a bicycle). Because the sacrifice reduces your gross pay, you pay less income tax and less National Insurance on the lower amount. HMRC treats the benefit as coming from your employer, so basic-rate, higher-rate and additional-rate taxpayers all save the same way.

Pension salary sacrifice: Your employer pays the contribution directly to your pension. It does not appear on your payslip as income. Basic-rate taxpayers save 28p per £1 sacrificed (20% tax + 8% NI). Higher-rate taxpayers save 42p per £1 sacrificed (40% tax + 2% NI).

Cycle to Work: Your employer buys the bike and accessories, then hires them to you over 12 months. You repay via salary sacrifice, saving tax and NI on the hire cost. At the end, you typically buy the bike at a small market value.

Employer NI saving: Your employer also saves 13.8% employer NI on the sacrificed amount. Some employers (particularly in the public sector) pass this saving back into your pension, boosting your pot further.

Salary Sacrifice Savings · Quick Reference 2026/27

Annual tax + NI saving for different sacrifice amounts and salary bands. England rates. Higher-rate threshold: £50,270.

Annual Sacrifice Basic Rate (20%) Higher Rate (40%) Net Cost (Basic) Net Cost (Higher)
£1,200 (£100/mo)£336£504£864£696
£2,400 (£200/mo)£672£1,008£1,728£1,392
£3,600 (£300/mo)£1,008£1,512£2,592£2,088
£6,000 (£500/mo)£1,680£2,520£4,320£3,480
£10,000£2,800£4,200£7,200£5,800

Basic rate saving = 20% tax + 8% NI = 28%. Higher rate saving = 40% tax + 2% NI = 42%. Assumes sacrifice stays within same tax band. Employer NI saving not included.

Related Calculators

Pension Pension Tax Relief Salary Bonus Tax Dividend Tax Self-Employed Tax Income Tax History ISA Living Wage Net Worth

Salary Sacrifice FAQs

How much do I save with salary sacrifice pension?
Basic-rate taxpayers save 28p for every £1 sacrificed (20% income tax + 8% employee NI). Higher-rate taxpayers save 42p per £1 (40% tax + 2% NI). So a £200/month pension sacrifice costs a basic-rate payer just £144/month out of take-home pay, while the full £200 goes into the pension. A higher-rate payer pays just £116/month in real terms.
Is salary sacrifice better than personal pension contributions?
Yes, in most cases. Personal pension contributions get basic-rate tax relief added by the provider (20%), and higher-rate taxpayers claim the extra via Self Assessment. Salary sacrifice gives you relief on NI too (8% or 2%), which personal contributions do not. The difference is most valuable for basic-rate taxpayers where the NI saving adds a significant extra 8%.
Does salary sacrifice affect my state pension or benefits?
Salary sacrifice reduces your NI-able earnings, which can in rare cases affect entitlement to contribution-based benefits (such as the State Pension, Statutory Maternity Pay, and certain credits) if your post-sacrifice pay falls below the Lower Earnings Limit (£6,396 in 2026/27). For most earners this is not a concern, but it is worth checking if you are near minimum wage. Some employers protect NI entitlement by structuring sacrifice carefully.
What is the cycle to work scheme and how much do I save?
The cycle to work scheme lets you buy a bike and cycling safety equipment through your employer using salary sacrifice, typically saving 28-42% depending on your tax band. The employer buys the bike and hires it to you over 12 months via salary sacrifice, with a small market-value payment at the end to own it. There is no cap on bike value since 2011, though some employers set their own limits.
Do employers have to share their NI saving with me?
No · employers are not legally required to pass on their NI saving (13.8% of the sacrificed amount). Some employers, particularly in the public and charity sectors, add their NI saving into your pension pot as a bonus contribution. This can add 13.8p for every £1 sacrificed on top of your own saving, significantly boosting your pension. Ask your employer or check your pension documentation.
Can I change my salary sacrifice arrangement at any time?
Generally no · salary sacrifice requires a formal agreement with your employer and a change to your contract. Most schemes allow changes at specific times such as the start of a new tax year, or on a life event (marriage, new child, moving house). HMRC requires the arrangement to be in place before the pay period, so you cannot backdate it.

For informational purposes only · Not financial advice · Tax rates shown are for 2026/27