Salary Sacrifice Worked Examples 2026/27: £30k, £40k, £50k Salaries

How to read these examples

All examples use England/Wales/Northern Ireland income tax rates for 2026/27. The personal allowance is £12,570. Income tax rates: 20% basic rate on £12,571–£50,270; 40% higher rate on £50,271–£125,140. Employee NI: 8% on £12,570–£50,270; 2% above that. Employer NI: 15% on all earnings above £5,000.

Each example shows a 5% pension sacrifice, a common starting point for employee pension contributions. Substitute your own sacrifice amount proportionally if needed. All figures are annual unless stated. 'Net cost' means the reduction in take-home pay after allowing for income tax and NI savings. The pension contribution itself is shown as gross, the amount that goes into the pension.

£30,000 salary, 5% sacrifice (£1,500 per year)

Gross salary: £30,000. Annual sacrifice: £1,500 (5%). Post-sacrifice gross for PAYE: £28,500. All the sacrifice sits in the basic-rate income tax band and the main employee NI band.

Income tax saving: £1,500 × 20% = £300. Employee NI saving: £1,500 × 8% = £120. Total personal saving: £420 per year, or £35 per month. Net take-home cost of the £1,500 pension contribution: £1,080 per year (£90 per month). Without sacrifice, the same £1,500 contribution under relief at source would cost only £300 in tax relief, the employee still pays NI on the full £30,000. The sacrifice route saves an extra £120 per year (the NI saving). Employer NI saving: £1,500 × 15% = £225 per year.

£40,000 salary, 5% sacrifice (£2,000 per year)

Gross salary: £40,000. Annual sacrifice: £2,000 (5%). Post-sacrifice gross: £38,000. All the sacrifice sits in the basic-rate and main NI band (well below the £50,270 threshold).

Income tax saving: £2,000 × 20% = £400. Employee NI saving: £2,000 × 8% = £160. Total personal saving: £560 per year, or £46.67 per month. Net cost of the £2,000 pension contribution: £1,440 per year (£120 per month). In other words, you put £167 per month into your pension and only feel £120 less in your pay packet. The employer saves 15% × £2,000 = £300 per year in NI, which if passed back in full takes the total pension input to £2,300 at a net cost to you of just £1,440.

£50,000 salary, 5% sacrifice (£2,500 per year)

Gross salary: £50,000. Annual sacrifice: £2,500 (5%). Post-sacrifice gross: £47,500. Note: the original salary of £50,000 is below the higher-rate threshold of £50,270, so all of the sacrifice sits in the basic-rate band. The saving is: income tax 20% × £2,500 = £500; NI 8% × £2,500 = £200; total £700 per year, or £58.33 per month. Net cost: £1,800 per year (£150 per month). Employer NI saving: £375.

Now consider a £52,000 salary with a £2,600 sacrifice (5%). The sacrifice spans the higher-rate threshold. The first £1,730 of sacrifice (from £52,000 down to £50,270) saves 40% tax + 2% NI = 42%. The remaining £870 (from £50,270 down to £49,400) saves 20% tax + 8% NI = 28%. Blended saving: (£1,730 × 0.42) + (£870 × 0.28) = £726.60 + £243.60 = £970.20. Net cost: £1,629.80 per year (£135.82 per month), noticeably less than the lower-salary example, because more of the sacrifice falls in the higher-rate band.

Bonus sacrifice: the additional higher-rate saving

Bonus sacrifice follows the same rules but may save more because bonuses are often taxed at the higher rate. If you earn £45,000 basic and receive a £5,000 bonus, the first £5,270 of the bonus (from £45,000 to £50,270) is taxed at 20% and NI at 8%, while the remaining £4,730 (above £50,270) is taxed at 40% and NI at 2%. Sacrificing the full £5,000 bonus before it is paid into the basic-rate portion saves 28p per pound (£1,400 total); the portion in the higher-rate band saves 42p per pound.

The timing rule for bonus sacrifice is critical: the election to sacrifice must be made before the bonus is declared as payable, not after. HMRC will not allow retrospective sacrifice after the employee has gained a right to the cash. Confirm the timing with HR before relying on this planning.

Using the calculator

Our main salary sacrifice calculator lets you enter any salary and sacrifice amount and returns a full breakdown: income tax saving, NI saving, employer NI saving, and net monthly take-home impact. Select your region (England/Wales/NI or Scotland) and student loan plan if applicable for a complete picture. Use the pension salary sacrifice calculator for pension-specific scenarios, or the bonus sacrifice calculator for pre-bonus election planning.