UK pensions · salary sacrifice · PAYE FY 2026/27 LIVE
See exactly how much take-home you give up versus how much lands in your pension — including employee & employer NIC savings — for every £ sacrificed. One-click rescue when your income is stuck in the £100,000–£125,140 60% trap.
Compare your take-home drop against the pension pot expansion when redirecting salary into a workplace sacrifice scheme. Income Tax, employee & employer NI savings calculated against the HMRC 2026/27 ruleset.
Higher-rate band · Every £1 sacrificed inside this band saves 40% income tax + 2% NI.
| Line | Baseline No sacrifice | With sacrifice £5,000 / yr | Δ Difference |
|---|---|---|---|
Gross PaySalary · pre-deduction | £85,000 | £85,000 | — |
Pension ContributionSalary sacrifice · pre-tax | — | £5,000 | +£5,000 |
Income TaxPAYE · 2026/27 bands | −£21,432 | −£19,432 | −£2,000 |
Employee NIClass 1 · 8% / 2% | −£3,711 | −£3,611 | −£100 |
Net Take-HomeFinal · in pocket | £59,857 | £56,957 | −£2,900 |
Employer NI Saving15% on sacrificed slice | — | — | +£750 |
Bands locked into this build. Sacrifice savings are computed against these exact thresholds.
You agree to a lower contractual gross salary; the employer pays the difference directly into your pension. Because tax and Class 1 NI are computed on the lower gross, you keep more of every £1 redirected — and the employer saves 15% NIC on the same slice, which many employers pass back into your pension.
Between £100,000 and £125,140 every extra £1 of gross loses 50p of Personal Allowance, so the effective marginal rate is 60% (plus 2% NI). Sacrificing just enough to bring gross down to £100,000 recovers the full £12,570 PA — typically the highest-leverage move available in UK PAYE.
Employers pay Secondary Class 1 NIC of 15% on most of your earnings in 2026/27. Salary sacrifice reduces the slice that NIC is charged on, so the employer saves 15% × the sacrificed amount. Some employers contractually return this saving to your pension; others keep it.
The government has slated an annual £2,000 employee NIC exemption cap on salary-sacrifice pension contributions from April 2029. Contributions under that threshold remain unaffected; sacrifices above it would still get income-tax relief but lose the employee NI saving on the excess.