UK Salary Sacrifice Calculator 2026/27 — Free Salary Sacrifice Estimate

Salary Sacrifice Tax & NI Saving Calculator

Adjust your salary and sacrifice amount — results update instantly.

Tax year 2026/27

Annual gross salary

Sacrifice amount (annual)

Scheme type

Taxpayer region

Employer NI saving passed on

Some employers pass their 15% NI saving as extra pension.

Take-home after

£42,457

Annual saving

£2,100

Net monthly cost

£242

Take-home after sacrifice £42,457

Income tax saving £2,000

Employee NI saving £100

Employer NI saving £750

Full before / after comparison

Item	Before	After sacrifice
Gross salary	£60,000	£55,000
Sacrifice amount	—	£5,000
Income tax	£11,432	£9,432
Employee NI	£3,211	£3,111
Take-home pay	£45,357	£42,457
Monthly take-home	£3,780	£3,538

Savings breakdown

Saving type	Annual	Monthly
Income tax saving	£2,000	£167
Employee NI saving	£100	£8
Employer NI saving	£750	£62
Net take-home reduction	£2,900	£242
Pension / benefit value	£5,000

Tax year 2026/27 · England/Wales/NI rates · Personal Allowance £12,570 (tapered above £100,000) · Employee NI 8% to £50,270 then 2% · Employer NI 15% above £5,000 · EV BIK 4% for 2026/27 · Estimates only — not financial or tax advice.

How it works

Three steps to estimate your salary sacrifice saving

Enter salary and sacrifice amount

Enter your gross annual salary and how much you want to sacrifice. Use the quick-select buttons for common amounts.

Choose scheme and region

Select pension, cycle to work, EV car or other. Choose England/Wales/NI or Scottish income tax rates to see the correct saving.

Review tax and NI savings

See your annual and monthly income tax saving, employee NI saving, and net cost — what the sacrifice actually costs in reduced take-home pay.

Worked example

£60,000 salary, £5,000 pension sacrifice

On a £60,000 salary in England/Wales/NI, a £5,000 annual pension salary sacrifice reduces your taxable salary to £55,000. The sacrifice falls partly in the higher-rate (40%) band: income tax saving is approximately £2,000. Employee NI saves £100 (2% rate above £50,270). Total annual tax and NI saving: £2,100.

Your take-home pay reduces by £2,900 per year (£242/month) — but you receive £5,000 into your pension. The pension effectively costs you £2,900 in reduced take-home, not £5,000. That is £2,100 better than paying from net pay.

Your employer also saves £750 in employer NI (15% × £5,000). If your employer passes this saving on, your pension pot can grow by that amount too — ask your employer's HR or payroll team.

FAQ

Salary sacrifice — common questions

What is salary sacrifice?

Salary sacrifice is a HMRC-approved arrangement where you give up part of your gross salary in exchange for a non-cash benefit — typically pension contributions, a cycle-to-work scheme or an EV company car. Because your gross salary is reduced, you pay less income tax and National Insurance.

How much National Insurance do I save with salary sacrifice?

Employee NI for 2026/27 is 8% on earnings between £12,570 and £50,270, and 2% above that. So if your salary sits in the 8% band, each £1,000 of salary sacrifice saves you £80 in NI alone, plus income tax relief on top.

Does salary sacrifice affect my state pension?

If your post-sacrifice salary falls below the Lower Earnings Limit (£6,396 for 2026/27), it can affect your state pension entitlement. Most people's sacrificed salary stays well above this, but it's worth checking if you sacrifice a large amount.

Is salary sacrifice different for Scottish taxpayers?

The NI saving is the same UK-wide. Income tax savings differ because Scotland has its own bands — the intermediate rate is 21% and the higher rate starts at a different point. Our calculator lets you select Scottish rates.

Can my employer pass on their NI saving to me?

Employers save 15% employer NI on the sacrificed amount. Some employers pass part or all of this saving back as an extra employer pension contribution. Our calculator shows the employer NI saving separately.

What EV benefit-in-kind rate applies for 2026/27?

For 2026/27 the benefit-in-kind rate on fully electric vehicles is 4%, rising to 5% in 2027/28. This affects the taxable benefit value when using salary sacrifice for an EV company car. Our calculator highlights this where relevant.

Calculator suite

Three more tools in the same network

UKSalarySacrificeCalculator is part of the UK Money Calculators network — free, independent tools for estimating UK tax and finances.

EmployerCalculator.co.uk

Employer NI & cost calculator

Employer NI at 15%, auto-enrolment pension and total cost to employ — the employer's perspective on salary sacrifice savings.

Visit EmployerCalculator.co.uk →

AfterTaxSalary.co.uk

UK take-home pay calculator

PAYE income tax, National Insurance, student loan and pension deductions — see your take-home before any sacrifice.

Visit AfterTaxSalary.co.uk →

PensionTaxReliefCalculator.co.uk

Pension tax relief calculator

Compare relief at source, net pay and salary sacrifice — see which method gives the most pension tax relief.

Visit PensionTaxReliefCalculator.co.uk →

Methodology

How we calculate salary sacrifice savings

We calculate take-home pay before and after the sacrifice using 2026/27 income tax and NI rates. The income tax saving is the difference in income tax on the sacrificed amount. The employee NI saving is the reduction in Class 1 employee NI. The employer NI saving is 15% of the sacrifice — your employer's secondary NI reduction.

For Scotland, we apply the published 2026/27 bands: 19% starter, 20% basic, 21% intermediate, 42% higher, 45% advanced, 48% top. The personal allowance tapers above £100,000 adjusted net income, reaching zero at £125,140. Our calculator applies this correctly.

Read full methodology →