A £3,000 pension sacrifice on a £60,000 salary saves approximately £1,260 in income tax and NI in 2026/27. The net cost to your take-home pay is £145/month.
With a £60,000 gross salary, a £3,000 pension sacrifice reduces your taxable salary to £57,000. You pay income tax and National Insurance on the lower figure, not the original £60,000.
At £60,000, some or all of your sacrifice falls within the higher-rate (40%) income tax band. Higher-rate sacrifice saves 40p in income tax per £1 — significantly more efficient than basic-rate relief. Employee NI above £50,270 is only 2%, so the NI saving is smaller on that portion of salary.
The £3,000 goes into your pension. You receive the full £3,000 pension contribution, but your take-home pay only falls by £1,740 per year (£145/month) — the difference is the tax and NI you no longer pay.