Salary Sacrifice Calculator

The Salary Sacrifice calculator shows how much income tax and National Insurance you save by exchanging gross salary for a non-cash benefit — most commonly pension contributions, an electric vehicle, a cycle-to-work bike or workplace nursery childcare. In 2025/26 a basic-rate (20%) employee saves 28% of the sacrificed amount (20% income tax + 8% NI) and a higher-rate (40%) employee saves 42% (40% + 2% NI). The employer also saves the 15% Class 1 secondary NI rate (up from 13.8% in April 2025), which some employers share with the employee. For pensions, the £60,000 annual allowance (2025/26) limits the maximum contribution that attracts tax relief. EV salary sacrifice is particularly tax-efficient because the Benefit in Kind on fully electric cars is just 3% in 2025/26 (rising to 4% in 2026/27 and 7% by 2028/29), so drivers commonly net 30-60% off list-price equivalent cost. Cycle-to-work has had no statutory upper limit since 2019; you sacrifice over 12-18 months and a small final transfer fee of 3-7% transfers ownership. This tool is for employees deciding whether to opt into a pension, EV, bike or childcare scheme; HR teams modelling employer NI savings; and higher-rate taxpayers boosting pensions to bring adjusted net income below £60,000 (avoiding HICBC) or £100,000 (preserving personal allowance). It is also useful for couples balancing pension contributions to maximise household tax efficiency. What the calculator does NOT model: the impact on Statutory Maternity/Paternity Pay (calculated on post-sacrifice salary), Statutory Sick Pay eligibility (drops if earnings fall below the LEL), mortgage affordability (most lenders use post-sacrifice salary), state pension entitlement (drops if earnings fall below the LEL of about £6,500), the cycle-to-work final transfer fee, or BIK on non-EV cars. National Minimum Wage must remain at or above £12.21/hour after sacrifice. Regional notes: salary sacrifice rules are UK-wide via HMRC. Scottish taxpayers should note that the additional savings come at Scottish income tax rates (21%/42%/45%/48%) on the relevant tranche of income, but Class 1 NI savings of 8%/2% are unchanged. Pair with the Pension, Take-Home Pay, Income Tax, National Insurance and EV Savings calculators.