Hundred SummersSalary sacrifice calculator: what does a pension contribution really cost?
Computed on this tax year's actual bands at your salary, rUK or Scottish, so the answer includes what flat-rate calculators miss: the 60% effective-relief zone between £100,000 and £125,140, and your employer's 15% NI saving if they pass any of it on. Your figures never leave your browser.
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Worked example
Computed when this page was built by the same engine that runs the calculator above, so the figures below and the live tool can never disagree. Change any input above to see your own.
| Inputs | |
|---|---|
| Salary | £60,000 |
| Sacrificed into the pension | £5,000 |
| Scottish taxpayer | No |
| Employer NI passed on | 0% |
| Results | |
|---|---|
| Income tax saved | £2,000 |
| Your NI saved | £100 |
| Employer's NI saved | £750 |
| Into the pension | £5,000 |
| Cost to your take-home | £2,900 |
| Effective relief | 42% |
The next question
ISA or pension for the next pound? →ISA vs pension calculator
Or answer it with everything else: the full Hundred Summers plan connects your pay, pensions, savings, property, tax and spending year by year, and stress-tests them across 500 simulated market histories.
Read the guides
- Optimising your plan: every lever, which ones apply to you, and how they fit together →The overview of every way a UK retirement plan can be improved (tax while you work, where your savings go, how you draw it down and what your estate pays) with a decision tree that finds the levers relevant to you, the combinations that pull against each other, and how to test them in Hundred Summers. Each lever links to the guide that goes deeper. Education, not advice.
- The pension annual allowance taper, explained →How the £60,000 pension annual allowance shrinks for high earners: adjusted income over £260,000, threshold income over £200,000, the £1-for-£2 taper down to £10,000, with worked examples.
- The 60% tax trap: earning between £100,000 and £125,140 →Why every pound between £100,000 and £125,140 is effectively taxed at 60% (62% with NI), how the personal allowance taper creates it, and why pension contributions in this zone get the best relief in the UK tax system.
- The £100k childcare cliff: the worst-designed threshold in UK finance →Cross £100,000 of adjusted net income by £1 and you lose all free childcare hours and Tax-Free Childcare: on top of the 60% tax zone. How the cliff works, which parent counts, and the pension escape route.
- Salary sacrifice, properly explained →How giving up pay for a pension contribution saves both income tax and National Insurance, the employer's saving and whether it is passed on, the 60% zone where a contribution costs 38p in the pound, the side effects, and the £2,000 cap announced for 2029.
- Student loans: a graduate tax in disguise, and why overpaying usually loses →How Plan 2 and Plan 5 repayments really work (9% above a threshold, not a debt you chip away at) why most borrowers never clear the balance before write-off, and the honest test for whether an overpayment is worth making.
- Bonuses: why so much disappears, and the move that keeps it →A bonus is taxed as the top slice of the year's pay, so it lands at your highest rate plus NI (42% gone for a higher-rate earner, more in the 60% zone), and a bonus sacrificed into a pension is the best-relieved contribution most employees ever make.
How salary sacrifice works
You agree a lower gross salary and your employer pays the difference straight into your pension. Because the sacrificed pay never reaches you, there is no income tax and no National Insurance on it: unlike a contribution from your bank account, which reclaims income tax but not NI. Employee NI is 8% up to £50,270 and 2% above, so basic-rate earners often save the most from the NI side.
Employers save their own 15% employer NI on every sacrificed pound. Nothing obliges them to share it, but many add some or all of it to your pension. It is always worth asking, because it is free money at no cost to them.
The trade-offs: a lower contractual salary can affect mortgage affordability checks and statutory pay; pension money is locked until at least 55 (57 from 2028); and contributions count toward the annual allowance. The full Hundred Summers plan models sacrifice inside your whole lifetime picture: take-home now, the pot at retirement, and the tax on the way back out.