Salary Sacrifice Calculator UK

Salary sacrifice reduces your gross pay, so you pay income tax and National Insurance on a lower amount. While your nominal salary is lower, the tax savings often mean your actual take-home pay is similar or even higher — especially if your employer passes on their NI savings too.

Common salary sacrifice benefits include: pension contributions, electric vehicles (EVs), cycle to work schemes, childcare vouchers (legacy), and holiday purchase schemes. Each type has different tax rules — our individual calculators cover each one.

Instead of paying pension contributions from your net pay, your employer deducts them before tax. This means you get full tax relief at your marginal rate automatically, plus NI savings. Both you and your employer benefit — see our Pension Salary Sacrifice Calculator for full details.

Your employer leases an electric vehicle and you sacrifice enough salary to cover the monthly lease cost. Because the Benefit in Kind (BiK) rate for EVs is just 3% (2026/27), the tax you pay on the benefit is very low — often much less than the tax you save through sacrifice.

Yes. Student loan repayments are based on your income above the plan threshold. If salary sacrifice reduces your income below the threshold, your repayments stop. If it reduces the amount above the threshold, your repayments fall proportionally.

You cannot sacrifice salary below the National Living Wage. Your employer must ensure your resulting pay does not fall below the NMW/NLW for your age group. This is the employer's responsibility, but it's worth being aware of if you're on a lower salary.

Our calculator uses current HMRC tax thresholds and rates for 2025/26 and 2026/27. Results are estimates for guidance only. Your actual figures will depend on your personal tax code, other income, allowances, and individual circumstances. Always check with your payroll team or a financial adviser.