Salary sacrifice calculator

Figures 2026/27 tax year Last checked 21 August 2026 Where these come from

On £110,000 a year, sacrificing £10,000 into a pension costs £3,800 of take-home pay — relief of 62%, higher than any income tax band, because the contribution also hands back the personal allowance withdrawn above £100,000.

Why the relief is not just your tax band

Sacrificed pay never becomes your income at all. That means it is not taxed, it does not carry National Insurance, it does not attract student loan repayments, and — the part almost nobody accounts for — it does not count towards the withdrawal of the personal allowance above £100,000.

So the relief is the sum of everything the pay would have attracted, which is why this page works it out by running the whole take-home calculation twice rather than by multiplying by a rate. That difference matters whenever a contribution spans a boundary: sacrificing £20,000 from £110,000 earns 62% on the first £10,000 and 42% on the rest, an effective 52%. Multiplying by one marginal rate would overstate it by nearly £1,800.

What catches people out

• Sacrificed pay never becomes your income, so it escapes income tax and National Insurance and it does not count towards the personal allowance taper. That last part is why the relief between £100,000 and £125,140 runs at 62% rather than at the 40% headline band — sacrificing there is the most valuable pound-for-pound relief in the UK system, and no rates table shows it.
• Relief above £125,140 is lower than relief just below it. Once the allowance is fully withdrawn there is nothing left to restore, so the rate drops back to 45% plus 2% National Insurance. A higher salary does not mean better relief.
• A sacrifice large enough to span the taper boundary gets a blended rate, not the top one. Sacrificing £20,000 from £110,000 earns 62% on the first £10,000 and 42% on the rest — an effective 52%. Multiplying a contribution by a single marginal rate overstates it.
• Salary sacrifice is not the same as a workplace pension deducted from your pay. A net pay arrangement saves income tax but not National Insurance. Relief at source gives basic-rate relief at the provider, with higher-rate relief claimed separately through Self Assessment. This page models sacrifice only, because it is the one whose arithmetic is unambiguous.
• Reducing your salary can affect things that are calculated from it — statutory maternity and paternity pay, mortgage affordability assessments, life cover set as a multiple of salary, and entitlement to some benefits. A sacrifice cannot take your pay below the National Minimum Wage at all.
• This does not check the pension annual allowance. That is £60,000 for the 2026/27 tax year, reduced by £1 for every £2 of adjusted income above £260,000 down to a floor of £10,000 — and it counts employer contributions as well as yours, and can be increased by unused allowance carried forward from the previous three tax years. No salary box can work that out.

Questions

Why is the relief higher than my tax band?

Because your tax band is only the income tax part. National Insurance comes off sacrificed pay too — 8% below the upper earnings limit, 2% above — and if you are repaying a student loan, that 9% goes as well.

Between £100,000 and £125,140 there is a third effect. Every £2 of income above £100,000 removes £1 of personal allowance, so every £2 sacrificed hands £1 of allowance back. That turns 40% income tax into an effective 60%, and 62% once National Insurance is counted.

Is this the same as the pension coming off my payslip?

Only if your employer runs salary sacrifice. If your payslip shows the pension deducted before both tax and National Insurance, it is sacrifice and this page matches it. If it comes off after National Insurance, that is a net pay arrangement and the relief here will be too high by the National Insurance share. If your provider adds money to your pot after you have been paid, that is relief at source and this page does not model it.

Your payslip or your HR team will say which. It is worth knowing, because the three are worth noticeably different amounts.

What does "cost per £1" mean?

How much less reaches your bank account for each £1 that lands in your pension. At 38p, putting £1,000 into the pension costs £380 of take-home pay — the other £620 is income tax and National Insurance you no longer pay.

It is worked out by running the whole take-home calculation twice, with and without the sacrifice, and taking the difference. That is why it stays right when a contribution spans two bands, which multiplying by a marginal rate does not.

Should I do this?

That is not a question this site answers, and not because of modesty. Recommending a course of action on a pension is regulated financial advice in the UK, and BriskCal is a calculator. What it can tell you is exactly what the arithmetic does: how much goes in, how much take-home you give up, and what the relief works out at.

What the arithmetic cannot see is your age, your other savings, your debts, when you need the money, or whether you can get at it — pension money is normally locked until 55, rising to 57 in 2028. Those are the parts that decide the answer. MoneyHelper is the government-backed free guidance service, and the FCA register lists authorised advisers.

What about the annual allowance?

Not checked here, and worth checking yourself. For 2026/27 it is £60,000, and it counts everything paid into your pensions in the year including your employer's contributions. If your adjusted income is over £260,000 it tapers down by £1 for every £2, to a minimum of £10,000. You may also be able to carry forward unused allowance from the previous three tax years.

Going over it does not stop the contribution, but the excess is taxed. Both gov.uk pages are linked at the bottom of this page.

Rates for 2026/27 were checked against these pages on 21 August 2026. If a figure here disagrees with the source, the source is right — tell us.

Take-home pay calculator

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