WageSalary Sacrifice Calculator
This calculator models salary sacrifice, where you agree to give up part of your gross salary in return for your employer paying the same amount into your pension. Because the sacrificed pay comes off before both income tax and National Insurance, it is the most tax-efficient way to contribute - you save NI as well as income tax on the amount sacrificed. Enter your salary and the amount you want to sacrifice, and the calculator shows your new take-home pay, the tax and NI saved, and how much lands in your pension.
Pension contribution calculator
| Your gross contribution | £2,250 |
| Employer contribution | £1,350 |
| Total into pension | £3,600 |
| Take-home without pension | £35,920 |
| Take-home with pension | £34,300 |
Auto-enrolment minimums are £6,240–£50,270 qualifying earnings, 8% total (3% employer + 5% employee). Relief-at-source shows the basic-rate top-up here; higher-rate relief, where due, is claimed via self-assessment or your tax code. Estimates, not advice.
How salary sacrifice works
Under salary sacrifice your contractual gross salary is reduced, and your employer pays the amount you gave up straight into your pension. Since your gross pay is lower, both the income tax and the National Insurance charged on it fall, which is what makes this method more efficient than net pay or relief at source.
The saving on National Insurance is the key difference. A net pay or relief-at-source contribution reduces your income tax but not your NI, whereas a salary-sacrifice contribution is never subject to employee NI in the first place. Some employers also pass on part of their own NI saving by adding it to your pension.
What the calculator shows
The calculator compares your position before and after the sacrifice: the reduction in take-home pay, the income tax saved, the National Insurance saved, and the total landing in your pension. Because the pension receives the full sacrificed amount, the cost to your take-home pay is smaller than the amount contributed.
For higher earners, sacrificing salary also lowers the income measured against the Personal Allowance taper between £100,000 and £125,140. Bringing income back towards £100,000 can restore allowance that would otherwise be withdrawn, which the calculator reflects in the tax saving.
Frequently asked questions
Why is salary sacrifice more efficient than other pension methods?
The sacrificed pay is taken before both income tax and National Insurance, so you save NI on top of the income tax relief. Net pay and relief at source save income tax but not employee NI.
Does salary sacrifice reduce my take-home pay by the full contribution?
No. Because you save tax and NI on the sacrificed amount, your take-home falls by less than the sum that goes into your pension.
General information, not advice. Estimates assume the standard 1257L tax code and typical circumstances; your payslip may differ by a pound or two because HMRC payroll software truncates at each step. Verify with HMRC or an accountant for any decision. WageReckon stores no salary data - the calculators run in your browser.
Sources
Rates for the 2026-27 tax year, current as of 24 July 2026. Source: HMRC (gov.uk). Contains public sector information licensed under the Open Government Licence v3.0. Source: HMRC / gov.uk. See how we calculate.