Calculate income tax and National Insurance savings from a pension salary sacrifice arrangement, including the employer NIC saving that can be passed on to your pension.
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Compares take-home pay before and after sacrificing salary into a pension (2025/26, rUK bands): you save income tax (20/40/45%) and employee NIC (8%/2%) on the sacrificed amount, while the employer saves 15% NIC which can be added to the pension.
£35,000 salary, £2,000 sacrifice, no employer passthrough: take-home falls by only £1,440 (saving £400 tax + £160 NIC) while £2,000 goes into the pension — 138.9% leverage. With 100% passthrough the pension receives £2,300.
Enter gross annual salary and the amount you want to sacrifice.
Set the share of the employer's NIC saving passed on to your pension (0–100%).
Read the drop in take-home vs the total pension contribution and effective leverage.
Last data update
July 5, 2026
Sources and references
HMRC — Salary sacrifice and the effects on PAYE (gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye); rates and thresholds for employers 2025/26; gov.uk/income-tax-rates.
The data in this calculator is updated regularly to reflect the latest official rates. When in doubt, consult the official sources listed above.
Employee NIC is 8% between £12,570 and £50,270 and 2% above (2025/26). The sacrificed amount escapes NIC entirely, on top of income tax relief at your marginal rate.
15% employer NIC on the sacrificed amount (above the £5,000 secondary threshold). Many employers pass part or all of this saving into the employee's pension.
Your contractual salary is lower: minimum wage rules must be respected, and salary-linked benefits (statutory maternity pay, life cover, borrowing capacity) may be affected.