Salary Sacrifice Calculator

For financial advisers and employers only

06 April 2022

This calculator can be used to produce individual quotes to help financial advisers and employers calculate the benefits that can be achieved through an agreed salary sacrifice between an employer and employee. Salary sacrifice isn’t suitable for all employees especially those who earn at or around the personal tax allowance. The information required to generate a quote will not be used for any purpose other than to illustrate the effect a salary sacrifice will have on an employee. You must have consent from an employee to use their information in the calculator and have a legal reason for processing the information used.

If you are looking to produce calculations for more than one employee, please refer to our Bulk Salary Sacrifice Calculator. Please note the layout and format of the bulk calculator is different to that used for the individual calculator.

Your salary sacrifice quote

This quote shows how a salary sacrifice agreement using the chosen quote options will affect your pay and pension contributions.

What is salary sacrifice?

It’s an arrangement between you and your employer, where you swap part of your gross salary (before tax and National Insurance (NI) deductions) for a non-cash benefit – in this case an employer pension contribution. You can only use salary sacrifice for future earnings. You won’t pay tax or NI on the gross salary you swap. You can either:

  • Boost your pension contributions and keep the same amount of net pay.
  • Boost your net pay and keep the same level of pension contributions.
  • Boost both your net pay and level of pension contributions.

Your employer may help you save even more by passing on some or all of the NI saving they make from the salary sacrifice arrangement.

The options selected for this quote are shown in the boxes and quote output below. Please study them carefully and ensure they are correct before agreeing to the salary sacrifice arrangement with your employer.

Complete the relevant fields with employee details

Optional
This is a required field.
Optional
This is a required field.
This is a required field.
This is a required field.
This is a required field.
This is a required field.
This is a required field.
This is a required field.
Choose the employee's country of residence. This is a required field.
Please fix the errors and resubmit.
Clear Calculate

Summary


Notes :

Notes :

Notes

  • This information is based on our understanding of current legislation, taxation law and HM Revenue & Customers (HMRC) practice, which may change.
  • If an employee has any questions about salary sacrifice, they should speak to their employer, local Department for Work and Pensions (DWP) office, or financial adviser. It’s also possible to find out more at www.gov.uk/personal-tax.

  • Salary sacrifice isn’t suitable for everyone and employees should think about:

    • the impact of any benefits provided by their employer that are linked to salary (for example, death benefits or overtime) although it’s possible for an employer to use a ‘notional’ or pre-sacrifice salary for these benefits.
    • mortgage lending that may be linked to actual salary received.
    • statutory benefits that may be affected by a reduction in salary – for example, the state pension, working tax credit, statutory sick pay, incapacity benefit and statutory maternity, paternity and adoption pay.
  • A salary sacrifice can’t reduce an employee’s salary below the National Minimum or Living Wage rates.
  • If an employer keeps some or all of the NI saving they’ll have to pay corporation tax. Their local Inspector of Taxes will decide whether or not to grant corporation tax relief on employer contributions. We haven’t shown this in the illustration.
  • Calculations are based on the rates and thresholds applicable for the tax year in which this illustration is produced.
  • The value of an investment can fall as well as rise and isn’t guaranteed. You may get back less than you originally invested.