Before tax and NI
The sacrificed amount is treated before estimated tax and NI, matching the usual payroll treatment where the contract has genuinely changed.
Salary Sacrifice Calculator UK
Estimate reduced cash pay, tax savings and NI savings.
2026/27 tax and NI assumptions
Reviewed 20 July 2026. The estimate uses bundled 2026/27 Income Tax and employee National Insurance assumptions. It shows the effect of reducing contractual cash pay, but cannot know your employer payroll setup, benefit rules or pension scheme terms.
Check current Income Tax rates and National Insurance contribution rates before relying on a decision.
How salary sacrifice is estimated
A salary sacrifice arrangement normally reduces contractual cash pay. This calculator estimates PAYE Income Tax and employee National Insurance on the reduced cash pay, then compares that result with the original salary.
The result separates the sacrificed amount, employee tax saving, employee National Insurance saving, estimated employer National Insurance saving and the reduced take-home pay. That makes it easier to see whether the benefit cost is mainly coming from your pay, from tax relief, from NI savings, or from any employer saving passed back into the benefit.
Not all benefits are equal
Some benefits have special benefit-in-kind rules. Pensions, cycle to work and other arrangements may be handled differently by employers.
Source notes
Salary sacrifice wording is based on HMRC guidance checked June 2026. The calculator uses bundled Clear Calculators UK tax and NI rates.
Checks before relying on the estimate
Salary sacrifice can affect more than the monthly net-pay figure. It may change contractual pay, pensionable pay, statutory payments, mortgage or loan affordability evidence, overtime calculations and employee benefits that are linked to salary. Employers must also make sure the arrangement does not reduce cash earnings below National Minimum Wage rules.
The optional hourly-rate fields are included as a prompt, not a legal determination. Real payroll can depend on contract wording, pay reference periods, benefit rules, tax code changes, bonus timing and employer policy. Treat the result as an estimate for planning and use it alongside employer scheme documents or payroll advice.
Salary sacrifice example
If an employee gives up part of monthly cash salary for a pension sacrifice, the sacrificed amount is usually removed before estimated Income Tax and employee National Insurance. The take-home pay may fall by less than the amount going into the pension because part of the contribution is effectively funded by tax and NI savings.
Some employers also add part of their employer NI saving to the pension or benefit. The calculator shows that employer saving separately so it is clear whether the extra value is coming from the employee, the employer, or both.
Ask what salary is affected
Check whether bonus, overtime, death-in-service cover, mortgage letters, statutory pay or other benefits use pre-sacrifice or post-sacrifice salary.
Check scheme documents
Employer rules can explain whether the arrangement is pension-only, cycle-to-work, childcare, car-related or another benefit with different tax treatment.
Compare with payslip
After the sacrifice starts, use the payslip checker to compare the tax, NI, pension and net pay lines against the estimate.
Salary sacrifice, pensions and student loans
For pension salary sacrifice, the employee usually gives up cash pay and the employer pays the agreed amount into the pension. That is different from a net pay or relief-at-source pension contribution, where the payslip deduction may be treated differently for Income Tax and National Insurance.
Salary sacrifice may also affect the pay figure used for student loan repayment estimates, depending on the arrangement and payroll setup. If you are comparing both effects, run this calculator first, then check the student loan repayment calculator and pension contribution calculator with the same pay assumptions.