Salary sacrifice: pension and car
Salary sacrifice pension calculator: take-home pay now and from April 2029
Enter your salary and the amount you give up a year. The calculator shows what reaches the pension, how much less you take home, and how that changes when the £2,000 cap on NI relief starts.
Independent site, not a government service. Relief is claimed through your pension provider, your payroll or HMRC (Self Assessment or the GOV.UK claim service).
Example, not your result yet· change a figure to see yours
Take-home pay falls by
£2,638
£4,000 reaches your pension, 34% of it paid by tax and NI savings.
| Salary given up | £4,000 |
| Income Tax saved | £1,146 |
| Employee NI saved now | £216 |
| Employee NI saved from April 2029 | £56 |
| Employer NI saved now | £600 |
| Same amount by relief at source | £2,854 |
| Sacrifice saves you, a year | £216 |
From 6 April 2029 your take-home pay would fall by £2,798 instead: NI comes back on £2,000 above the £2,000 cap.
Your employer must keep your cash pay at or above the National Minimum Wage after the sacrifice.
With salary sacrifice you agree a lower salary and your employer pays the difference into your pension. Because the money never becomes pay, it escapes Income Tax and Class 1 National Insurance at once: 8% of employee NI between £12,570 and £50,270, 2% above, and the employer's own 15% (HMRC, salary sacrifice for employers). On £52,000, giving up £4,000 saves £1,146 of Income Tax and £216 of NI, so take-home pay falls by only £2,638. The same £4,000 paid by relief at source would cost £2,854. The government has announced that from 6 April 2029 only the first £2,000 a year of pension salary sacrifice will be free of NI, for employees and employers (HM Treasury and HMRC, April 2029 changes); Income Tax relief stays. On these figures the sacrifice would then cost £2,798.
Figures checked by Radif Partners · Editorial policy · How the sums are done
£4,000 into the pension, five salaries
Each row puts £4,000 gross into the pension and shows the effect on take-home pay three ways. The NI gain is largest between £12,570 and £50,270, where employee NI is 8%; above that it is only 2%, which is why higher earners care more about the Income Tax and the employer's 15%.
| Salary | Relief at source | Sacrifice now | Sacrifice from April 2029 | Employer NI saved now | From April 2029 |
|---|---|---|---|---|---|
| £28,000 | £3,200 | £2,880 | £3,040 | £600 | £300 |
| £40,000 | £3,200 | £2,880 | £3,040 | £600 | £300 |
| £52,000 | £2,854 | £2,638 | £2,798 | £600 | £300 |
| £70,000 | £2,400 | £2,320 | £2,360 | £600 | £300 |
| £95,000 | £2,400 | £2,320 | £2,360 | £600 | £300 |
What the calculator counts, and what it does not
It applies the 2026/27 Income Tax bands and Class 1 rates for category A employees from HMRC, rates and thresholds for employers 2026 to 2027, on a whole-year basis. Payroll works period by period, so a single month with a bonus can give a slightly different NI figure. It ignores student loan repayments, which also fall when salary is sacrificed, and benefits such as Universal Credit. For a sacrificed salary that crosses £100,000, the gain on the Personal Allowance is included, since salary given up lowers adjusted net income.
Before and after the cap
The £2,000 cap is government policy, published by HM Treasury and HMRC on 26 November 2025, with further guidance promised before April 2029. The calculator applies it to the employee and employer NI on the part of the sacrifice above £2,000 and keeps Income Tax relief unchanged, as announced. The guide to the April 2029 cap explains who loses most, and the Child Benefit guide shows why a family with income between £60,000 and £80,000 can still gain far more than NI. Electric cars through sacrifice follow other rules: see the car calculator.
A worked example with an employer top-up
Suppose the employer passes on half of its NI saving. On £52,000, sacrificing £4,000 saves the employer £600, and half of that, £300, is added to your pension. The pension then receives £4,300 for the same fall in take-home pay. Set the employer NI field to 50 to see it. Under the April 2029 rules the employer would save NI only on the first £2,000, so the top-up would fall too. Payslips show the sacrifice as a deduction before tax, often labelled with the scheme name; the pension provider records the money as an employer contribution.