Salary sacrifice calculator

Salary sacrifice (sometimes called salary exchange) provides an ideal opportunity to make pension contributions and save on National Insurance. Our easy-to-use salary sacrifice calculator helps show the financial benefits of this, and can work out figures based on a percentage of salary or fixed amount.

Use our pension salary sacrifice calculator to see how you could benefit.

Find out more about Simple and SMART salary sacrifice.

Important information

Legal & General takes no responsibility for how the results from this calculator are used.

The information in this calculator is based on our current interpretation of the law and tax rates, which may change in the future. The value of tax relief will depend on your individual circumstances including where you reside (individuals resident in Scotland and Wales are subject to slightly different tax rates and those are not currently incorporated into the calculator). You can find out more about tax rates at

The value of any money invested in a pension plan can go down as well as up. Any money invested in a pension plan is normally tied up until retirement benefits are taken, which is usually at any time from age 55.

Please note: The tax year figures in the Salary Sacrifice calculator are based on 2021/22 tax rates.


Please note that these calculations are based on rates for English taxpayers. Tax rates may be different depending on where you live within the UK.

Some employers interchange the terms ‘simple’ and SMART for salary sacrifice. The meanings used for the calculator are below:

Simple salary sacrifice and SMART salary sacrifice

Salary sacrifice means you can exchange part of your salary in return for a non-cash benefit from your employer. If, for example, the non-cash benefit is a pension contribution, your employer would pay this, along with a contribution they might make, directly into your pension pot.

There are two ways in which you can do this ‘simple salary sacrifice’ and ‘SMART’ (Save more and reduce tax).  Both methods mean that the employee (and employer) pay less National Insurance.

For simple salary sacrifice, the portion of your salary given up is agreed with your employer and is a fixed amount. As you're effectively earning a lower salary, both you and your employer will pay lower National Insurance Contributions (NICs). With this method the amount that you, the employee, save in National Insurance is reflected in your take home pay, which means that your take-home pay will increase.

For SMART salary sacrifice, the amount that you, the employee, save in National Insurance is instead paid into the pension. Your take home pay would be the same as if you didn’t use salary sacrifice. Your employer may choose to pass on the amount they save in National Insurance too but they don’t have to.

In other words:

  • your take-home pay will remain the same
  • the total amount contributed to your pension will increase.

Not all employers offer salary sacrifice, so check with your employer or visit your scheme website.

Read our guide to salary sacrifice.