Compare the same salary under different assumptions
The table compares the cash result of the same gross offer. A pension contribution is retirement saving; a student-loan deduction is repayment. Neither should be described as simply an additional Income Tax rate.
| Annual gross | No pension / loan | Plan 2 only | 5% sacrifice + Plan 2 |
|---|---|---|---|
| £75,000.00 | £4,504.78 | £4,162.67 | £4,009.55 |
| £100,000.00 | £5,713.12 | £5,183.50 | £4,979.34 |
| £120,000.00 | £6,346.45 | £5,666.84 | £5,521.84 |
| £150,000.00 | £7,607.20 | £6,702.59 | £6,427.59 |
Monthly equivalents of 2026/27 annual estimates, England/Wales/Northern Ireland, standard 1257L, no other income or benefits. A 5% sacrifice is based on full gross pay here, not qualifying earnings or a net-pay scheme.
A pension changes both cash pay and the package
At £120,000, a £20,000 salary sacrifice reduces contractual cash pay to £100,000 in this standard illustration. Compare £76,157.40 annual take-home before sacrifice with £68,557.40 afterwards: cash pay falls by £7,600.00, while £20,000 goes into the pension.
This is current tax and NI treatment, not a guaranteed investment return. Annual allowance, employer scheme terms, minimum-wage rules, access age and later pension tax still matter. A personal SIPP payment and a net-pay pension do not normally produce the same NI saving as salary sacrifice.
Five questions before accepting the offer
- What part of the package is guaranteed cash, and what depends on performance?
- How many paid hours and working days does the salary cover?
- What pension contribution is required and which tax-relief method is used?
- Are benefits such as a company car taxable, and is a cash alternative available?
- What changes in childcare costs, commuting or loan repayments affect the household result?
Compare the offer, then check the first payslip
An annual salary comparison does not reconstruct pay and tax already collected during the year. A bonus paid in one month can also differ from an annualised estimate because of payroll NI and loan thresholds.
Keep your offer, pension election and tax-code notice. Use the bonus comparison for extra earnings, the Scottish calculator where applicable, and the career research guide for earnings-data limitations.
Frequently Asked Questions
Clear answers based on official HMRC rules and statutory guidance.