UK Workplace Pension Calculator
Before you take that lucrative-looking job in the Gulf, let's model your pension over 20 years. Does the Gulf package still look as good?
Remember to account for this number, or you'll be left behind.
Annual pension input
5% employee + 3% employer
Tax relief element
1% tax relief inside the 5% employee total
Employee net cost
4% from take-home pay at the default
In many auto-enrolment schemes the common minimum is 5% employee: 4% from take-home pay plus 1% basic-rate tax relief.
Auto-enrolment often uses qualifying earnings between £6,240 and £50,270, but many employers use full salary.
20-year pension projection
Full salary basisAm I better off with salary sacrifice?
For most employees, salary sacrifice is the more tax-efficient way to pay into a pension. Model it below.
20-year pension comparison: standard vs sacrifice
Current rulesThis is the gross salary you give up. Your employer pays the same amount into your pension instead.
April 2029 mode applies the £2,000 annual NIC exemption cap for pension salary sacrifice.
This sacrifice appears above the hourly minimum wage floor on the assumptions entered.
What makes the pension pots differ
Both routes invest the same gross pension contribution. Salary sacrifice reduces your take-home cost through employee NI savings. The pension pot itself is larger only if your employer adds some of its NI saving. With no employer pass-back, the two projection lines overlap. April 2029 mode caps the amount that receives NI relief at £2,000 a year.
Salary sacrifice result
Current rulesWhat salary sacrifice means
A salary sacrifice arrangement, sometimes called salary exchange, is a formal change to your employment contract. Instead of receiving your full cash salary and then paying into a workplace pension, you agree to reduce your gross pay by a set amount. Your employer then pays that amount directly into your pension as an employer contribution.
Because your official gross salary is lower, income tax and National Insurance are calculated on a lower pay figure. In a standard pension setup you usually get income tax relief, but you still pay employee NI on your original salary. Salary sacrifice lowers the pay figure first.
You save income tax at your marginal rate and may also save employee NI: usually 8% in the main NI band or 2% above the Upper Earnings Limit.
The employer may save 15% Class 1 employer NI on the sacrificed amount. Some employers keep this; others pass some or all of it into your pension.
If employer NI savings are passed back, your pension can grow faster without increasing the employer's total employment cost.
How the workplace pension calculator works
The calculator starts with annual employee and employer pension contributions, projects them for 20 years, then estimates income tax, employee Class 1 National Insurance and employer Class 1 National Insurance before and after salary sacrifice.
For worked examples and what changes in April 2029, read the salary sacrifice guide.
The default is the common 8% auto-enrolment minimum: 5% employee and 3% employer. The employee percentage includes basic-rate tax relief.
Annual contributions are added once per year and compounded at your selected growth rate to show an illustrative pension pot after 20 years.
The separate sacrifice input is an additional contribution on top of the workplace percentages. The retirement comparison uses the same gross contributions in both routes; only employer NI pass-back adds to the sacrifice pot. Current and April 2029 cap modes show the NI difference.
- Income tax is modelled for England, Wales and Northern Ireland, not Scottish bands.
- The calculator assumes a standard employee NI category A profile.
- Workplace pension minimums can be based on qualifying earnings or full salary, depending on scheme rules.
- It does not model student loans, child benefit taper, childcare, benefit entitlement or statutory pay.
- Employer pass-back is optional. Many schemes pass back none, some, or all of the employer NI saving.