Workplace Pension Calculator
Start with salary, employee contribution and employer contribution to see the 20-year pension pot. Then check what salary sacrifice changes on take-home pay and employer NI.
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.
You are modelling the 8% workplace minimum
At 5% employee and 3% employer, £3,200 goes into the pension each year before investment growth.
20-year pension projection
Full salary basisWhat changes if the employee contribution is sacrificed?
This section uses the employee gross pension contribution above as the salary sacrifice amount. It shows whether the same pension saving could cost less because of National Insurance.
What salary sacrifice actually 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.
This 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.
Salary sacrifice saves employee NI
The calculator compares the employee pension contribution above made normally versus through salary sacrifice.
Salary sacrifice result
Current rulesThis sacrifice appears above the hourly minimum wage floor on the assumptions entered.
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.
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 employee gross pension contribution is then treated as the sacrifice amount. 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.