Does salary sacrifice reduce adjusted net income?

Yes. Under a genuine salary sacrifice arrangement the amount you give up never becomes taxable pay, so it is not in gross income and never needs to be deducted again. That lower contractual pay is what feeds adjusted net income for the £100,000 tests.

Is salary sacrifice the same as paying into a personal pension?

No. Salary sacrifice changes your contract so the money is never pay. Relief at source and net pay arrangements are different: the contribution is still pay first, then relief is given by another route. Mixing the two up is a common way to mis-state adjusted net income by twenty percent.

Can salary sacrifice keep me under £100,000?

It can change the arithmetic: sacrificed pension (and some other sacrificed amounts) never enter the income that is tested. Whether any particular sacrifice is available, or sensible for you, depends on your employer scheme, annual allowance, and personal circumstances — that is outside what this calculator decides.

Does salary sacrifice also reduce National Insurance?

Usually yes for a pension salary sacrifice, because employee NI is charged on earnings. That is separate from the adjusted net income test. The calculator shows income tax and employee NI on the figures you enter; it does not redesign your employment contract.

Where do I enter sacrifice on this site?

Use the salary sacrifice / salary exchange field for amounts your payslip treats that way. Use the relief-at-source or net-pay fields only when that is how your scheme actually works. The working panel shows how each type was treated.

2026/27 tax year · England, Wales and Northern Ireland

How salary sacrifice sits against £100,000

Salary sacrifice (also called salary exchange or SMART) changes what counts as pay before tax. That is why it is one of the few levers that can move adjusted net income relative to the £100,000 line without changing the headline “bonus” number people talk about.

What salary sacrifice actually does

In a genuine salary sacrifice arrangement you and your employer agree to reduce your contractual cash pay, and something else — often an employer pension contribution — is provided instead. The amount given up is not paid to you as earnings, so it does not appear as taxable pay for income tax or, for a typical pension sacrifice, as NI-able earnings either.

Adjusted net income starts from taxable income. If the money never became taxable income, there is nothing to subtract later. That is the opposite of relief at source, where you are paid first and the scheme then adds basic-rate tax relief on top of what you send from a bank account.

Why the £100,000 tests care

The personal allowance taper and the Tax-Free Childcare / funded hours cliff both look at adjusted net income for the tax year. Anything that never enters that figure moves you relative to £100,000 compared with taking the same cash as salary.

Example shape: contractual pay that would have been high enough to sit over the line can sit under it once a pension sacrifice is stripped out of pay — provided the arrangement is real and the amount is large enough. The calculator below applies that treatment when you put the sacrificed amount in the salary sacrifice field rather than in relief at source.

The adjusted net income walkthrough shows the full build-up; this page is only about the sacrifice step.

Sacrifice is not the same as “paying a pension”

People use “I put money in my pension” for three different payroll stories:

Salary sacrifice / exchange. Pay is reduced; the employer contributes. The sacrificed amount is never your taxable pay.
Net pay arrangement. Contributions come out before tax is calculated on the payslip, but the treatment for National Insurance differs from sacrifice.
Relief at source. You pay from taxed income; the scheme reclaims basic rate. Adjusted net income is reduced by the grossed-up contribution, not by leaving the money out of pay in the first place.

Putting a relief-at-source payment into the sacrifice box (or the reverse) will mis-state both tax and the distance to £100,000. Match the field to the label on your payslip or scheme literature.

Enter sacrifice the way your payslip labels it

Figures update as you type. There is nothing to submit.

Your figures never leave your browser. Payslips are read on your device — not uploaded, not sent to an AI. The calculation runs here too. Nothing you type is stored, logged, or passed to analytics.

Where do you pay income tax?

Scottish income tax rates and bands differ and are not covered by this tool.

England, Wales or Northern IrelandScotland

How do you want to enter your pay?

Drop a payslip to fill year-to-date figures, or enter amounts yourself below. The rest of the calculator appears once you confirm.

Use figures from a payslip

Drop a file below, check the figures, then apply. Or type year-to-date totals by hand.

Drop a payslip or P60 here

or click to choose a file

PDF preferred; a clear photo works too. Read on your device only — never uploaded. One month’s slip is enough to project the year and check the £100,000 line.

Figures are extracted in your browser (text layer or on-device OCR). The file is never sent to us, never passed to an AI provider, and is gone when you close this tab.

Choose how to enter your pay above to see your figures.

Enter figures yourself, or drop a payslip. The rest of the form appears once you confirm.

Reading the result

When sacrifice is entered correctly, adjusted net income is built from the lower pay figure. The taper cost, childcare eligibility, and the gross pension contribution shown to reach £100,000 all use that ANI. If the result still looks wrong, the usual cause is a contribution typed into the wrong pension box.

Crossing the line still has the same consequences described in the 60% band and childcare eligibility: the arithmetic changes only because the starting income is different.

What this page does not do

It does not tell you to enter or leave a sacrifice arrangement.
It does not check your annual allowance, scheme rules, or opt-out rights.
It does not model Scottish income tax rates and bands.

Scheme booklets and HMRC guidance on salary sacrifice set out when an arrangement counts. Where the numbers matter, confirm them with an accountant or your payroll team.