Salary 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.

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 — 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.