Salary Sacrifice Calculator

Understanding Salary Sacrifice

Salary sacrifice is one of the most tax-efficient ways to receive benefits from your employer. By agreeing to reduce your contractual gross salary, you avoid paying income tax and National Insurance on the sacrificed amount. Your employer also saves on their NI contributions, and many pass this saving on to you as additional pension contributions.

Common Salary Sacrifice Benefits

The most popular salary sacrifice arrangements include pension contributions, cycle-to-work schemes, electric car salary sacrifice (which also saves on Benefit in Kind tax), and technology schemes. Each has different rules and tax implications, but the core principle is the same: you receive a benefit worth more than the reduction in your take-home pay.