Salary sacrifice calculator
Sacrificing £200 a month never costs you £200. See what it really takes out of your take-home once tax and National Insurance are accounted for.
How this is calculated
Salary sacrifice reduces your contractual salary, so it comes off before income tax, National Insurance and student loan repayments are worked out. That is what makes it different from a deduction taken after the fact.
The calculator runs your full position twice, once at the original salary and once at the reduced one, and compares the two take-home figures.
The gap between what you sacrifice and what your take-home actually falls by is the tax and National Insurance you would have paid anyway.
Between £100,000 and £125,140 the effect is much larger, because sacrificing also restores personal allowance that was being tapered away. In that band sacrifice can cost as little as 40p in the pound.
Rates used · 2026/27
| Basic rate taxpayer | sacrifice costs about 72p per £1 |
| Higher rate taxpayer | about 58p per £1 |
| Between £100k and £125,140 | about 40p per £1 |
| With a student loan | 9p per £1 cheaper again |
| Floor | cannot take you below National Minimum Wage |
| Scotland, starter rate 19% | £12,571 to £16,537 |
| Scotland, basic rate 20% | £16,538 to £29,526 |
| Scotland, intermediate 21% | £29,527 to £43,662 |
| Scotland, higher rate 42% | £43,663 to £75,000 |
| Scotland, advanced rate 45% | £75,001 to £125,140 |
| Scotland, top rate 48% | Above £125,140 |
Last checked July 2026. Source: HMRC and gov.uk.
Worked example
On £45,000, sacrificing £250 a month is £3,000 a year. Take-home falls by only £2,160, because £600 of income tax and £240 of National Insurance would have gone anyway. Every £1 sacrificed costs you 72p, so £180 a month buys £250 of pension.
Common questions
What is the catch?
Your gross salary is genuinely lower, which affects mortgage affordability, statutory maternity and redundancy pay, and any benefit calculated on salary. Worth pausing before a mortgage application.
Can I sacrifice as much as I like?
No. Your employer cannot let a sacrifice take you below the National Minimum Wage, and pension contributions have their own annual allowance.
Does it affect my State Pension?
It can, if it takes your earnings below the level at which you build a qualifying year. At normal salaries this is not an issue.
Is it better than a net pay pension?
For the same contribution, yes, because it saves National Insurance as well as income tax. The pension pot receives the same amount and it costs you less.