Pensions, 2026/27
Salary sacrifice calculator
Compare the three ways to pay into a pension: take-home, pension and real cost.
Payments
Deductions
Checked 20 October 2026 against GOV.UK, Rates and thresholds for employers 2026 to 2027, and the Scottish Rate Resolution 2026-27. How we check.
Does not model benefits in kind, two jobs or directors' National Insurance. Monthly figures are the yearly amounts divided by 12. Payslips can differ by a few pounds a year.
These figures are estimates based on the information you entered and the 2026/27 rates and thresholds published by HMRC (and, for Scottish taxpayers, the Scottish Parliament). They are general information, not tax, financial or legal advice. Your actual take-home pay can differ, for example because of your tax code, pension arrangements, benefits, student loan plan or payroll timing. Check your payslip, or ask your employer or HMRC, before relying on these figures.
The three ways to pay in
| Method | Take-home a month | Into your pension a year | Net cost to you a year | Cost per £1 saved |
|---|---|---|---|---|
| Salary sacrifice | £2,573.30 | £2,000.00 | £1,440.00 | £0.72 |
| Net pay arrangement | £2,559.97 | £2,000.00 | £1,600.00 | £0.80 |
| Relief at source | £2,559.97 | £2,000.00 | £1,600.00 | £0.80 |
Three ways to pay in, three different payslips
Salary sacrifice, net pay and relief at source all put the same money into a pension, but they change take-home pay differently. The table above shows each.
How each method works
Salary sacrifice
You agree to a lower salary and your employer pays the difference into your pension. Because your pay is lower, you pay less income tax, National Insurance and student loan, and your employer pays less National Insurance. Some employers add their saving to your pension.
Net pay arrangement
Your contribution is taken from your pay before income tax, so you get tax relief at your top rate straight away. National Insurance and student loan repayments are still worked out on your full pay.
Relief at source
Your contribution is taken from your pay after tax. You pay 80% and your pension provider claims the other 20% from HMRC. Taxpayers above the basic rate (in Scotland, above the 20% basic rate) claim the extra relief through Self Assessment or by contacting HMRC.
Sources: GOV.UK: Salary sacrifice and the effects on PAYE; GOV.UK: Tax on your private pension, pension tax relief.
The 2029 change to salary sacrifice
The government has announced that from 6 April 2029, pension contributions made through salary sacrifice above £2,000 a year will pay employee and employer National Insurance. Income tax relief is not affected. Today's figures above use the 2026/27 rules, where there is no limit. Source: GOV.UK: Salary sacrifice reform for pension contributions from 6 April 2029.
Things a lower salary can affect
Salary sacrifice cannot take your cash pay below the National Minimum Wage. Because your contractual salary is lower, it can also change figures worked out from salary, such as some statutory payments, mortgage affordability checks and workplace life cover. Ask your employer how their scheme treats these before you sign up.