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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

    BeforeAfterChange
    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.

    Important notes

    Salary sacrifice arrangements must be formally agreed with your employer and may affect other benefits (e.g. life cover multiples, mortgage affordability, statutory pay). This tool shows the tax and NI mechanics only, not legal or HR implications.

    This calculator does not check pension annual allowance or tapered annual allowance limits. Use the Pension Tax Relief Calculator to verify your contribution room.

    Note: A £2,000 NIC cap on salary sacrifice benefits is scheduled from April 2029, this is not modelled in this version.

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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