Salary Sacrifice Calculator UK 2026/27
Calculate your tax and NI savings from salary sacrifice
What is salary sacrifice?
Salary sacrifice is an arrangement where you give up part of your salary in exchange for a non-cash benefit from your employer, such as pension contributions, cycle-to-work schemes, or childcare vouchers. It reduces your taxable income.
How much tax do I save with salary sacrifice?
You save both Income Tax and National Insurance on the sacrificed amount. For a basic rate taxpayer, that's typically 28% (20% tax + 8% NI). Higher rate taxpayers save even more - up to 42% (40% tax + 2% NI).
What benefits can be salary sacrificed?
Common salary sacrifice benefits include: pension contributions, cycle-to-work schemes, electric vehicles (company car), childcare vouchers (closed to new applicants), and additional annual leave.
Does salary sacrifice affect my state pension?
Salary sacrifice reduces your NI-able earnings. If your salary after sacrifice falls below £6,725, you may not qualify for that year's State Pension credit. Most people sacrifice amounts that don't affect this.
Can my employer refuse salary sacrifice?
Yes, salary sacrifice is a voluntary arrangement that requires employer agreement. Your employer must set up the scheme and agree to the terms. Not all employers offer salary sacrifice options.
Savings include both Income Tax and National Insurance.
Pension
Most tax-efficient, employer may add their NI saving
Cycle to Work
Up to £1,000 bike + accessories
Electric Vehicle
Low BIK rates make EVs attractive