Salary Sacrifice Calculator — 2026/27
What is the Salary Sacrifice Calculator?
Salary sacrifice is an arrangement where you give up part of your gross salary in exchange for a non-cash benefit (most commonly pension contributions, electric-vehicle leases, or cycle-to-work). Because the sacrificed amount is taken before tax and NI, both employee and employer save National Insurance, increasing the effective contribution.
Last reviewed: against HMRC rates for 2024/25 & 2025/26.
Worked example
Sacrifice £5,000 of a £60,000 salary into pension: save £2,000 income tax + £100 NI = £2,100. Plus 13.8% employer NI saving (£690), often passed back into the pension.
Frequently asked questions
+How much can I save with salary sacrifice?
A higher-rate taxpayer typically saves 42% (40% income tax + 2% NI) on every pound sacrificed into pension. A basic-rate taxpayer saves 28% (20% + 8%).
+Does salary sacrifice affect my mortgage application?
It can. Lenders increasingly accept post-sacrifice salary if the sacrifice is documented. Some still use post-sacrifice gross, which may reduce maximum borrowing. Disclose your full pre-sacrifice income on applications.
+Can I sacrifice into an electric vehicle?
Yes — EV salary sacrifice is highly tax-efficient because the Benefit-in-Kind rate on fully electric cars is just 3% in 2025/26, rising to 5% by 2027/28.
+Is there a limit on pension salary sacrifice?
The annual allowance is £60,000 (2026/27), tapering down to £10,000 for very high earners (income over £260,000). Sacrifice cannot reduce salary below National Minimum Wage.