Simple Salary / Salary sacrifice pension calculator
Salary sacrifice pension calculator
See what a salary sacrifice pension really costs you each month, how much more goes into your pension than comes out of your pay, and what your employer saves.
What is salary sacrifice?
You agree to a lower salary and your employer pays the difference into your pension. Because your salary is lower, you pay less income tax and less National Insurance, and your employer pays less National Insurance too. The pension contribution itself is the same money, just routed before tax.
How much does salary sacrifice save compared with a normal pension?
The National Insurance. A normal workplace pension (net pay or relief at source) saves you income tax but not NI. With salary sacrifice you also save 8% NI on the sacrificed amount if you earn under £50,270, or 2% above that. Your employer saves 15%.
Are there any downsides?
Your official salary is lower, which can reduce mortgage borrowing based on a salary multiple, statutory maternity or sick pay, and life cover based on salary. You cannot sacrifice below the National Minimum Wage. From April 2029 the NI saving will be capped on contributions above £2,000 a year.
Does it affect my student loan?
Yes, helpfully. Student loan repayments are based on your pay after salary sacrifice, so sacrificing into a pension also reduces your loan repayments.
Rates last checked against gov.uk on 11 October 2026.
Sources
Please note
Estimates only. Your scheme may use qualifying earnings rather than full salary, and your employer decides whether to pass on any of its NI saving.