PAY & TAX

Salary Sacrifice Calculator

Q: What does this salary sacrifice calculator show?

It compares estimated pay before and after a salary sacrifice arrangement and shows the effect on Income Tax, National Insurance, student loans and take-home pay.

Q: What counts as salary sacrifice?

Salary sacrifice is when gross salary is reduced in exchange for a non-cash benefit or employer pension contribution, such as pension salary sacrifice, electric car schemes or cycle-to-work arrangements.

Q: Why is the take-home reduction smaller than the sacrifice amount?

Because salary sacrifice usually reduces taxable and NIable pay, which can lower Income Tax, National Insurance and sometimes student loan deductions.

Q: Can every employee use salary sacrifice?

Not always. Employers usually cannot reduce cash earnings below the applicable minimum wage through salary sacrifice, so the calculator provides a simple warning check.

Estimate how salary sacrifice affects your take-home pay in the 2026/27 tax year. Compare your pay before and after sacrifice, see your tax and NI savings, and work out the true net cost of the benefit.

Your pay details

Gross salary (£)

Salary frequency

Annual bonus (£, optional)

Tax region

Tax code

Undergraduate student loan plan

Postgraduate loan

Current employee pension method

Current employee pension input type

Current employee pension contribution

Current employee pension frequency

Employer pension input type

Employer pension contribution (optional)

Employer pension frequency

Existing pension contributions are included before the extra sacrifice is applied. Relief at source uses the immediate payslip impact only, so later self-assessment relief is not added here.

Salary sacrifice type

Extra sacrifice input type

Extra amount to salary sacrifice

Extra sacrifice frequency

Employer NI shared back (%)

BIK taxable value (£, optional)

Apply BIK tax to sacrificed benefit Blind person’s allowance NI exempt

Hours per week (for NMW check)

Minimum wage assumed (£/hour)

Salary Sacrifice Calculator – FAQs

What does this salary sacrifice calculator show?

It compares your estimated pay before and after a salary sacrifice arrangement. It shows the reduction in gross pay, the impact on Income Tax, employee National Insurance and student loan repayments, and the true reduction in your take-home pay.

What counts as salary sacrifice?

Salary sacrifice is when you agree to reduce gross salary in exchange for a non-cash benefit or employer pension contribution. Common examples include pension salary sacrifice, electric car schemes and cycle-to-work arrangements.

Why is the take-home reduction smaller than the sacrifice amount?

Because sacrificing salary usually lowers taxable pay and National Insuranceable pay. That means you can save tax, NI and sometimes student loan repayments, so the net reduction in take-home pay is often lower than the gross amount sacrificed.

Does this include the £100k personal allowance trap?

Yes. The calculator includes personal allowance tapering above £100,000 of adjusted net income, so you can see when sacrifice helps preserve more of your personal allowance.

Can every employee use salary sacrifice?

Not always. An employer usually cannot reduce your cash earnings below the applicable minimum wage through salary sacrifice. This calculator flags cases where the arrangement may fail a simple minimum wage check.

This calculator provides general estimates only and does not constitute financial, tax, legal, payroll, or regulated advice.