A £4,000 pension sacrifice on a £75,000 salary saves approximately £1,680 in income tax and NI in 2026/27. The net cost to your take-home pay is £193/month.
With a £75,000 gross salary, a £4,000 pension sacrifice reduces your taxable salary to £71,000. You pay income tax and National Insurance on the lower figure, not the original £75,000.
At £75,000, 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 £4,000 goes into your pension. You receive the full £4,000 pension contribution, but your take-home pay only falls by £2,320 per year (£193/month) — the difference is the tax and NI you no longer pay.