Salary sacrifice and pension calculator
See what pension contributions really cost you, with salary sacrifice or a net pay scheme, and whether you are in the £100,000 trap.
Salary sacrifice also saves National Insurance. From April 2029, NI will apply to salary-sacrificed pension contributions above £2,000 a year. Your employer’s contribution is extra.
Why pension contributions cost less than they look
Pension contributions get tax relief: a basic-rate taxpayer pays £80 for every £100 that goes into the pension, a higher-rate taxpayer £60. With salary sacrifice you also save National Insurance, so it costs even less.
The £100,000 trap
Between £100,000 and £125,140 you lose £1 of personal allowance for every £2 you earn. With 40% tax that means an effective rate of 60% (62% with NI). Pension contributions reduce your adjusted net income, so they can win back the allowance.
Frequently asked questions
Is salary sacrifice always better?
It saves more tax, but it lowers your official salary, which can affect mortgage applications, statutory pay and some benefits. Check with your employer.