Methodology — How We Calculate Salary Sacrifice Savings (2026/27)

Overview

We calculate take-home pay before and after the salary sacrifice using published 2026/27 rates. The calculator runs entirely in the browser — no data is sent to our servers.

Income tax — England, Wales and Northern Ireland

Personal Allowance: £12,570. Tapers above £100,000 adjusted net income — reduce by £1 for every £2 above £100,000. Zero at £125,140.
Basic rate 20% on taxable income up to £37,700 (gross £12,571–£50,270).
Higher rate 40% on taxable income from £37,701 to £112,570 (gross £50,271–£125,140).
Additional rate 45% above £112,570 taxable income (gross above £125,140).

Income tax — Scotland (2026/27)

Starter rate 19% on taxable income £0–£3,967.
Basic rate 20% on taxable income £3,968–£16,956.
Intermediate rate 21% on taxable income £16,957–£31,092.
Higher rate 42% on taxable income £31,093–£62,430.
Advanced rate 45% on taxable income £62,431–£125,140.
Top rate 48% above £125,140 taxable income.
Personal Allowance and taper rules are the same as rUK.

Employee National Insurance (2026/27)

0% on earnings up to £12,570 (Lower Primary Threshold).
8% on earnings from £12,571 to £50,270 (Upper Earnings Limit).
2% on earnings above £50,270.
These rates apply UK-wide regardless of which income tax region you are in.

Employer National Insurance

15% on earnings above £5,000 secondary threshold. Salary sacrifice reduces the employee's gross salary, so the employer pays NI on a smaller base. The employer NI saving shown is 15% of the sacrifice amount. Some employers pass this saving back as extra pension contribution — use the "Employer NI passed on" option to model this.

What we do not model

Student loan repayments (these are unaffected by salary sacrifice for most plans).
Benefit-in-kind tax on EV cars — the 4% BIK rate is mentioned but not fully calculated.
Impact on mortgage affordability calculations (lenders may use pre-sacrifice salary).
Annual Allowance limits on pension contributions (usually £60,000).
Company-specific scheme rules or pension provider restrictions.