Salary sacrifice calculator
Compare the same pension contribution as net pay and as salary sacrifice to see the tax and National Insurance savings (usually 2–12% of every pound you sacrifice).
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Net pay vs salary sacrifice
| Item | Net pay | Salary sacrifice | Difference |
|---|---|---|---|
| Gross annual | £50,000 | £50,000 | £0 |
| Income tax | £6,986 | £6,986 | £0 |
| National Insurance | £2,994 | £2,794 | £200 |
| Student loan | £1,855 | £1,630 | £225 |
| Take-home pay | £35,665 | £36,090 | £425 |
Your pension pot grows by the same amount in both cases, but salary sacrifice also lowers your National Insurance, which net pay never does. Employers also save NI of around 13.8% on the sacrificed amount. Some pass part of that back, which makes salary sacrifice worth even more.
Uses 2026-27 HMRC rates. Assumes the same pension percentage under both methods, a monthly pay period, and that any earned salary remains above the National Insurance primary threshold.
What salary sacrifice really does
With net pay (and 'relief at source') pensions, your contribution is added to your pension pot and you get tax relief, but National Insurance is still charged on that money. Salary sacrifice swaps that cash for an employer pension contribution, so neither income tax nor National Insurance applies.
The savings are usually worth 30p in the pound at basic rate (20% tax + 8% employee NI) and far more above £50,270. Above the upper earnings limit employee NI falls to 2%, so anyone earning over about £55,000 still saves at least 22p in the pound.