In-depth guides covering every aspect of UK salary sacrifice — pensions, electric cars, the cycle to work scheme, Scotland, and more. All updated for the 2026/27 tax year.
When you sacrifice salary, your gross pay is reduced before tax and National Insurance are worked out, so you are taxed on a smaller amount. For a pension sacrifice this means the full sum goes into your pension without income tax or NI being deducted first — usually more efficient than paying pension contributions from your take-home pay.
The saving is larger for higher-rate taxpayers, and employers save 15% employer National Insurance on the sacrificed amount, which some pass into your pension to boost it further. But salary sacrifice is not always the right choice: a lower gross salary can affect mortgage borrowing, statutory maternity pay and some state benefits, and you cannot normally sacrifice below the National Minimum Wage. These guides cover both the savings and the trade-offs so you can decide with the full picture.