Salary sacrifice and take-home pay 2026/27
With salary sacrifice you give up part of your gross salary in exchange for a pension contribution. Because the sacrificed amount never appears on your payslip, it reduces the base for income tax and employee National Insurance and student loan repayments — which is why it usually beats net pay and relief at source for take-home pay, especially once you are in the higher or additional rate bands.
Three methods at £50,000
| Method | Taxable income | Income tax | NI | Pension (you) | Take-home |
|---|---|---|---|---|---|
| No pension | £37,430.00 | £7,486.00 | £2,994.40 | £0.00 | £39,519.60 |
| Net pay (5%) | £34,930.00 | £6,986.00 | £2,994.40 | £2,500.00 | £37,519.60 |
| Salary sacrifice (5%) | £34,930.00 | £6,986.00 | £2,794.40 | £2,500.00 | £37,719.60 |
| Relief at source (5%) | £37,430.00 | £7,486.00 | £2,994.40 | £2,500.00 | £37,019.60 |
All figures are annual, England/Wales/NI, 2026/27, no student loan. A 5% contribution on £50,000 is ££2,500.00. Salary sacrifice reduces the NI and loan bases; net pay does not; relief at source keeps tax on full gross and adds 20% relief via the provider.
At other salaries
- £30,000 sacrifice comparison
- £40,000 sacrifice comparison
- £50,000 sacrifice comparison
- £60,000 sacrifice comparison
- £80,000 sacrifice comparison
- £100,000 sacrifice comparison
The trade-offs change with your tax band: at £30,000 the NI saving is small; at £100,000+ salary sacrifice is one of the few ways to soften the personal-allowance taper. Full salary pages: £30,000, £50,000, £100,000.