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    NI & Salary Sacrifice Helper

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    NI & Salary Sacrifice Helper

    Last reviewed:

    Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact HMRC. Read our editorial scope →

    See how much Income Tax and National Insurance you save by sacrificing salary or bonus into your pension.

    Estimates only – not tax advice. For planning purposes only; does not replace professional advice or official HMRC calculations. Full disclaimer

    Your Pay

    £
    £

    Current Pension

    5%
    3%

    Sacrifice Options

    £
    £
    0%

    % of employer NI saving redirected to your pension

    Summary

    Pension Increase

    +£4,600

    per year

    Net Pay Change

    -£3,350

    per year

    Total Tax & NI Saved

    £2,090

    You save £1,400 • Employer saves £690

    You sacrifice £5,000 of salary.

    Your net take-home changes by -£3,350 per year.

    Your annual pension funding increases by +£4,600.

    Before After Sacrifice

    Before After Change
    Gross Salary £50,000 £45,000 -£5,000
    Income Tax £7,486 £6,486 -£1,000
    Employee NI £2,994 £2,594 -£400
    Your Pension £2,500 £2,250 -£250
    Net Take-Home £37,020 £33,670 -£3,350
    Employer NI £5,644 £4,954 -£690
    Employer Pension £1,500 £6,350 +£4,850
    Total Pension £4,000 £8,600 +£4,600

    Strategy Comparison

    • Net Pay
    • Total Pension

    Assumptions used in this calculation (click to expand)

    What this calculator assumes

    • Employee is over 21 and below State Pension age (standard Class 1 NIC).
    • Salary sacrifice is a contractual variation, not a notional reduction (HMRC compliant).
    • Sacrificed amount goes into a registered pension scheme (no BIK arising).
    • Employer passes on all or part of NIC saving as agreed in the scheme inputs.
    • Sacrifice does not reduce salary below National Minimum Wage.

    Not included in this calculation

    • Cycle-to-work, EV salary sacrifice, or other non-pension sacrifice schemes.
    • Tapered Annual Allowance interaction (use Pension Relief Calculator).
    • Auto-enrolment minimum contribution interaction.
    • Scottish rate of Income Tax (calculator uses rUK rates).

    Statutory basis

    • ITEPA 2003 Pt 4 (exemptions for employer pension contributions)
    • SSCBA 1992 Pt I (Class 1 NIC charging)
    • Finance Act provisions setting current NIC rates
    How this is calculated (click to show the formula)

    NIC + Income Tax saving

    Saving = Sacrifice × (Marginal Income Tax rate + Employee NIC rate) + (Employer NIC rate × Sacrifice × passed-on %)

    The employee saves Income Tax + employee NIC on the sacrificed amount. The employer saves employer NIC, optionally shared back into the pension pot.

    Pension Tax Relief →

    Check your annual allowance and tax relief on contributions

    Dividend Tax →

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    Salary vs Dividend →

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    Who handles this kind of work

    If you decide you want professional support, the specialisms relevant here are:

    • Pension scheme administrators, Workplace pension and trust-based pension scheme administrators.

    We don't name specific firms or platforms here. TaxKiln is editorial reference, not a directory.

    Last reviewed:

    £0k