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 |
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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.
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.
Related calculators
Other UK tax calculators that pair with the Salary Sacrifice.