UK Salary Sacrifice Calculator 2026/27
See what salary sacrifice really costs for 2026/27 - pension, cycle-to-work, EV lease, childcare vouchers. Tax + NI savings, all four UK regions.
Take-home pay
£30,880
28.0% effective tax rate Income Tax plus employee National Insurance as a percentage of your gross salary. Excludes pension, student loan, and HICBC.
- Monthly
- £2,573
- Weekly
- £594
- Daily
- £119
- Hourly
- £15.84
| Gross salary | £40,000 |
|---|---|
| Sacrificed | −£2,000 |
| Tax + NI saved | +£560 |
| Net cost to take-home | −£1,440 |
| Take-home after sacrifice | £30,880 |
How salary sacrifice works
You agree with your employer to give up part of your gross salary in exchange for a benefit of equal value. The deduction happens before Income Tax and National Insurance, so you save both on the sacrificed amount.
For a £1,000 sacrifice:
- Basic-rate taxpayer (20% IT + 8% NI): net cost ≈ £720
- Higher-rate above UEL (40% IT + 2% NI): net cost ≈ £580
- Additional-rate (45% IT + 2% NI): net cost ≈ £530
Common UK schemes
- Pension (the biggest use-case): relief is automatic, no Self Assessment claim needed.
- Cycle to Work (Bike2Work, Cyclescheme): up to £1,000 of bike + accessories.
- EV car lease: leases for fully electric cars attract only 2% Benefit-in-Kind, making the net cost very low.
- Childcare vouchers: closed to new joiners since 2018 but legacy users can continue.
- Tech/gadget schemes: laptops, phones via salary sacrifice (BiK may apply).
- Holiday buy: swap a few days of salary for extra annual leave.
Watch out for
- Your reduced salary must stay above the National Minimum Wage.
- Lower gross salary = lower mortgage borrowing headroom — lenders usually use gross.
- Statutory Maternity Pay (SMP) is calculated on the reduced salary in the 8 weeks before qualifying week. Don't ramp up sacrifice just before mat leave.
- Redundancy pay is based on reduced gross.
Related guides
- Salary Sacrifice Explained — the wider mechanics, eligible schemes, and watch-outs.
- Pension Auto-Enrolment — the floor most employees build sacrifice on top of.
- Company Car Tax (BIK) 2026/27 — why EV salary sacrifice dominated 2020-2025 and what the 2026/27 rates look like.
Related calculators
Other UK tax calculators that pair with the Salary Sacrifice.
Frequently asked questions
What can I sacrifice my salary for?
Common UK schemes: pension contributions, cycle-to-work (bikes + accessories), EV car lease, childcare vouchers (legacy - closed to new joiners), holiday buy, technology schemes, gym memberships. All reduce your gross salary pre-tax.
How much tax do I save?
The sacrifice is deducted before Income Tax and National Insurance, so you save both. Basic-rate: 28% (20% IT + 8% NI). Higher-rate above UEL: 42% (40% IT + 2% NI). Additional rate: 47% (45% IT + 2% NI).
Are there any downsides?
Lower gross salary means: lower mortgage borrowing capacity, lower pension auto-enrolment base (if not on salary sacrifice), reduced maternity/redundancy pay, and lower state pension credits if you drop below the Lower Earnings Limit (£6,396).
Is salary sacrifice always allowed?
No - your employer must offer the scheme and HMRC must approve the benefit type. Your reduced salary cannot fall below the National Minimum Wage.
Does this include employer NI savings?
We model only your personal tax and NI saved. Employers also save 15% NI on the sacrificed amount (up from 13.8% before April 2025) - some generous schemes pass this back into your pension.