How to Ask Your Employer for Salary Sacrifice and Check It on Your Payslip (2026/27)

This guide is general information, not advice.

This is for employees who want to pay into a pension, lease an electric car or get a bike through salary sacrifice, and need to know how to ask, what to sign and how to check it has been done properly. Why the arrangement saves Income Tax and National Insurance, and how the pension, EV and cycle schemes compare, is covered in salary sacrifice explained; this guide is the procedure.

By the end you will have a request you can send, a checklist for the contract change, and a way to confirm on your first payslip that the sacrifice has gone through on the right side of the tax and NI lines.

Before you start

Have ready:

• your current contract or offer letter, showing your contractual salary;
• a recent payslip, to compare with the first one after the change;
• your pension scheme name and your current contribution rate, if it is a pension sacrifice;
• any dates that matter: a planned maternity or adoption leave, or a mortgage application, in the coming months.

Know which benefits can still be taken tax-efficiently. HMRC’s Salary sacrifice for employers (updated 6 April 2026) says benefit-in-kind exemptions generally do not apply through salary sacrifice. The only benefits an employer does not need to value or report under a sacrifice are: payments into pension schemes, employer-provided pensions advice, workplace nurseries, childcare vouchers and directly contracted childcare that started on or before 4 October 2018, and bicycles and cycling safety equipment, including cycle to work. For a car with CO2 emissions of no more than 75g/km, the normal benefit-in-kind rules are always used. Childcare vouchers are therefore closed to anyone starting now.

Step-by-step

1. Find out whether your employer runs a scheme. GOV.UK tells employers they “can set up a salary sacrifice arrangement by changing the terms of your employee’s employment contract” and that “your employee needs to agree”. Nothing in that guidance obliges an employer to offer one. Check the staff handbook or benefits portal first.

2. Put the request in writing. Keep it short and plain. Say which scheme you want to join, how much salary you want to give up (a monthly amount or a percentage), and from which pay date. Ask the employer to confirm four things in reply: the date the contract change takes effect; whether your pension contributions, overtime, pay rises, holiday pay and sick pay will be worked out on your pre-sacrifice or reduced salary; whether it passes on any of its own National Insurance saving to your pension; and how it will make sure the sacrifice does not take your pay below the minimum wage. HMRC’s guidance leaves each of these to the employer, and says the basis for pay-related payments must be made clear to you.

3. Check the contract variation before the first reduced pay date. HMRC’s manual at EIM42760 sets two conditions for a sacrifice to work: the contract must be effectively varied before the changes are implemented, and the revised arrangement must genuinely leave you entitled to lower cash pay plus a benefit. EIM42765 adds that you must agree the change “well in advance” of the first payment under it; if the variation is not complete by then, you remain entitled to, and are taxed on, the old higher salary. GOV.UK also says the contract must be “clear on what their cash and non-cash entitlements are at any given time”. Keep your signed copy.

4. Check the minimum wage floor. GOV.UK: “A salary sacrifice arrangement must not reduce an employee’s cash earnings below the National Minimum Wage (NMW) rates. Employers must put procedures in place to cap salary sacrifice deduction”. If you are 21 or over, your cash pay for the hours you work must still be at least the National Living Wage of £12.71 an hour in 2026/27 (current rates).

5. Weigh the knock-on effects before you sign. GOV.UK says salary sacrifice can reduce statutory pay and can remove it altogether: if the sacrifice takes your average weekly earnings below the lower earnings limit, the employer does not have to make statutory payments. For 2026/27 that limit is £129 a week (HMRC rates and thresholds). That rule no longer applies to Statutory Sick Pay in Great Britain: section 11 of the Employment Rights Act 2025, in force from 6 April 2026, removed the lower earnings limit and made SSP the lower of the weekly cap and 80% of your normal weekly earnings, so a sacrifice can still reduce SSP if 80% of your reduced earnings falls below the cap. It can also affect earnings-related benefits such as Maternity Allowance and Additional State Pension, and contribution-based benefits. For a mortgage, HMRC’s manual at EIM42770 says the figure a lender uses “is a matter for the lender”, and EIM42771 lists giving earnings information to a mortgage lender as a legitimate use of a notional, pre-sacrifice salary.

6. Check your first payslip. Either format is acceptable. EIM42770 says a payslip may show a lower gross pay, or may show the old gross with the sacrificed amount “shown as a deduction made before PAYE and NICs is applied”, and that where the contract has been effectively varied the format “will not be used to challenge the effectiveness of the arrangement”. What you are checking is that tax and National Insurance are calculated on the lower figure. For a pension, also confirm the full sacrificed amount reached the pot as an employer contribution: the steps are in how to check pension tax relief is being paid.

Deadlines and what happens next

Timing. There is no statutory deadline, but the variation must be complete before the first reduced payment is due (EIM42765). Ask for the change in good time before a payroll cut-off.

Opting out or changing the amount. GOV.UK says the contract must be altered each time you opt in or out. Arrangements can allow a change on a lifestyle event such as marriage, divorce, or a partner becoming redundant or pregnant. As a general rule, if you can swap between cash and the benefit whenever you like, the tax and NI advantages do not apply (EIM42755 explains why).

Pensions from 6 April 2029. The National Insurance Contributions (Employer Pensions Contributions) Act 2026, section 1, has effect from the 2029-30 tax year and requires the first regulations under it to set a contributions limit of £2,000 a year. HMRC’s April 2029 explainer says only the first £2,000 of pension salary sacrifice each year will then be exempt from NI; the excess will attract employee and employer NI but stays free of Income Tax within the usual limits. Nothing changes for 2026/27, and HMRC says employers will make the payroll changes.

Common mistakes

• Only checking the tax line. Under a sacrifice both Income Tax and NI should fall. If NI has not moved, ask payroll whether the amount is being taken as an ordinary pension contribution instead.
• Forgetting planned leave. A large sacrifice ahead of maternity or adoption leave can reduce statutory pay, or remove it if average weekly earnings fall below the lower earnings limit.
• Assuming overtime and pay rises follow the old salary. GOV.UK says these can be based on the notional or the reduced salary, as long as it is made clear to you. Get the answer in writing.

Worked example

An employee in England earns £36,000 a year, paid monthly, with a 1257L tax code, and sacrifices £1,800 a year (£150 a month) into the workplace pension. The rates below are the site’s 2026/27 ruleset, matching HMRC’s rates and thresholds for 2026 to 2027: Personal Allowance £12,570, basic rate 20%, employee NI 8% above the £12,570 Primary Threshold. Figures are annual amounts divided by 12, ignoring rounding in the PAYE tables.

	Before	After
Gross pay (or gross less pre-tax sacrifice)	£3,000	£2,850
Income Tax	£390.50	£360.50
Employee NI	£156.20	£144.20
Employer pension contribution from the sacrifice	£0	£150

On the first payslip you should see tax fall by £30 and NI by £12 a month against the previous one, with £150 going to the pension. If tax and NI have not both fallen, the amount is not being treated as a sacrifice: raise it with payroll. The £1,800 a year is also under the £2,000 limit that applies to pension sacrifice from April 2029. Model other amounts in the salary sacrifice calculator.

Related reading

• Salary sacrifice explained - why it saves tax and NI, and how the pension, EV and cycle schemes compare.
• Salary sacrifice calculator - your own take-home before and after.
• How to check your pension tax relief is being paid - confirming the sacrificed amount reaches your pension.