Salary sacrifice calculator for the UK
Salary sacrifice moves pay into your pension before tax, which cuts income tax, National Insurance and any student loan all at once. Type your yearly gross and the amount you would sacrifice for 2026/27, pick your nation and any student loan, and the tool shows what each line saves, including the Personal Allowance recovery inside the £100,000 taper band.
For the 2026/27 UK tax year, each £1 sacrificed into a pension between £100,000 and £125,140 of gross income saves 62% in tax and NI by also restoring 50p of Personal Allowance.
By Mike, the developer behind ukmoneycalc. Every figure here is recomputed in code from the 2026/27 HMRC bands, not typed by hand, and re-checked each week against gov.uk. The savings come from comparing your take-home with and without the sacrifice, so stacked effects like the Personal Allowance taper show up instead of a flat headline rate.
The sacrifice scan
Each row is what happens when you sacrifice one pound of gross salary at that income, for England, Wales and Northern Ireland with no student loan. Values are in pence per pound sacrificed, except the effective rate column which is the savings rate on the pound. Shaded rows are inside the Personal Allowance taper, where each pound sacrificed also recovers 50p of allowance.
| Gross income | Income tax saved | NI saved | PA recovered | Effective rate |
|---|---|---|---|---|
| £30,000 | 20p | 8p | · | 28% |
| £50,000 | 20p | 8p | · | 28% |
| £80,000 | 40p | 2p | · | 42% |
| £100,000 | 40p | 2p | · | 42% |
| £110,000 | 60p | 2p | 50p | 62% |
| £120,000 | 60p | 2p | 50p | 62% |
| £125,140 | 60p | 2p | 50p | 62% |
| £150,000 | 45p | 2p | · | 47% |
| £200,000 | 45p | 2p | · | 47% |
Values are computed from the 2026/27 income tax, National Insurance and student loan figures cited in Sources below. A sacrifice of more than £1 scales these numbers roughly linearly inside a band, with jumps at thresholds.
With a Plan 2 student loan
Salary sacrifice also cuts your student loan repayment, because the loan is collected on gross income after pension. The Plan 2 rate for 2026/27 is 9% of income over £29,385, so a sacrificed pound above that threshold saves a further 9p on top of the tax and NI savings.
| Gross income | Income tax saved | NI saved | Plan 2 saved | PA recovered | Effective rate |
|---|---|---|---|---|---|
| £30,000 | 20p | 8p | 9p | · | 37% |
| £50,000 | 20p | 8p | 9p | · | 37% |
| £80,000 | 40p | 2p | 9p | · | 51% |
| £100,000 | 40p | 2p | 9p | · | 51% |
| £110,000 | 60p | 2p | 9p | 50p | 71% |
| £120,000 | 60p | 2p | 9p | 50p | 71% |
| £125,140 | 60p | 2p | 9p | 50p | 71% |
| £150,000 | 45p | 2p | 9p | · | 56% |
| £200,000 | 45p | 2p | 9p | · | 56% |
Plans 1, 4, 5 and postgraduate use the same mechanism at different thresholds and rates; use the calculator above to model them.
Where sacrifice quietly doubles
The standout row in the scan is inside the Personal Allowance taper. Each pound of gross earned between £100,000 and £125,140 removes 50p of Personal Allowance, which is itself taxed at 40%. So an extra pound earned there costs 40p income tax, 2p National Insurance, plus 20p on the recovered allowance, a 62% effective rate.
- Sacrificing into pension reverses the taper. Each pound sacrificed brings adjusted income back below £100,000, restoring 50p of Personal Allowance. So a sacrificed pound inside the taper saves 60p of income tax, 2p of NI, and recovers 50p of allowance that is itself taxed at 40%, the 62% effective rate. gov.uk ↗
- With a Plan 2 loan it climbs further. A graduate inside the taper also loses 9p of every pound to Plan 2, so sacrificing a pound saves 71% effective. gov.uk ↗
- Basic-rate taxpayers save the headline rate. At £30,000 of gross a sacrificed pound saves 20p income tax and 8p NI, a 28% effective rate. No PA recovery happens because the taper has not started. gov.uk ↗
How the savings work
Salary sacrifice is a contractual change to your pay. You agree with your employer that a portion of gross salary goes straight into your workplace pension, instead of being paid to you and then contributed net. Because the contribution never reaches your pay packet, it is not taxed at all on the way in: no income tax, no National Insurance, and no student loan collected on it.
That is a stronger outcome than a relief-at-source personal pension contribution, which only recovers income tax (and at basic rate if you are a higher-rate payer who claims the extra relief manually). Salary sacrifice recovers NI as well, and stops student loan collection on the sacrificed amount too, which is why the effective rate in the scan exceeds the headline income tax rate.
The trade-off is lower salary on paper, which can affect mortgage applications based on gross salary, life-cover multiples, statutory redundancy, and employer pension matching if your scheme bases matching on post-sacrifice pay. The 2026/27 annual allowance on pension savings is £60,000 including employer contributions, with a lower money purchase annual allowance of £10,000 if you have already started drawing a pension. gov.uk ↗
Common questions
How much does salary sacrifice save per pound?
For 2026/27 it depends on where your gross income sits. A basic-rate payer outside any taper saves 28% on each sacrificed pound (20p income tax plus 8p NI). A higher-rate payer inside the £100k Personal Allowance taper saves 62% per pound because the contribution also restores 50p of Personal Allowance that is taxed at 40%.
Does salary sacrifice reduce my student loan?
Yes. Student loan deductions for 2026/27 are collected on gross income after pension, so salary sacrifice shrinks the figure the loan is calculated on. Plan 2 takes 9% of income over £29,385, so a sacrificed pound above the threshold saves 9p on top of the tax and NI savings.
What is the salary sacrifice savings rate at £100k?
Just inside the taper, around 62% effective. Each pound sacrificed brings adjusted income back below £100,000, restoring 50p of Personal Allowance that is taxed at 40%, on top of the 40p higher-rate income tax and 2p National Insurance on that pound.
What is the pension annual allowance for 2026/27?
The annual allowance is £60,000 including employer contributions. Salary sacrifice counts toward it, so a sacrifice that pushes total pension inputs above £60,000 in a tax year faces an annual allowance tax charge on the excess.
Sources and disclaimers
- Income tax rates and bands for England, Wales and Northern Ireland gov.uk
- Income over £100,000 and the Personal Allowance taper gov.uk
- Rates and thresholds for employers 2026/27 HMRC
- Repaying your student loan, what you pay gov.uk
- Tax on your private pension, annual allowance gov.uk
Informational estimates based on 2026/27 HMRC rates, not regulated financial advice.
ukmoneycalc.com is not authorised or regulated by the Financial Conduct Authority.
Salary sacrifice depends on your employer offering it and on your scheme rules; the figures above assume your employer agrees and that the sacrifice does not reduce pay below the National Minimum Wage.
Tax rates and thresholds change, often each April, always confirm against HMRC before you rely on a figure for a money decision.
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