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Bonus Sacrifice Calculator

Sacrificing a bonus into your pension removes it from taxable pay — you save Income Tax and employee NI, and your employer can pass back their 15% NI saving too. This calculator compares taking the bonus as cash vs sacrificing into your pension, with 2026-27 rates, Scotland bands, the £100K Personal Allowance taper, and the High-Income Child Benefit Charge built in.

01 —INPUTS
Your bonus

Some employers add part of their 15% NI saving to your pension pot.

Used to check the £60k Annual Allowance.

02 —RESULTS
Cash vs Sacrifice
Take bonus as cash
£51,157
Net bonus in pocket£5,800
Pension added£0
Effective tax on bonus42.0%
Sacrifice 100% into pension
£55,357
Net bonus in pocket£0
Pension added£10,000
Effective tax on bonus0.0%
Gain from sacrificing+£4,200
Each £1 sacrificed produces 42.0% of free value (tax + NI + employer NI passthrough).
Tax traps this unlocks
High-Income Child Benefit Charge: Your cash bonus triggers HICBC. Sacrifice reduces adjusted net income and can preserve your Child Benefit.
Watch outs

Your cash-bonus adjusted income (£70,000) triggers the High-Income Child Benefit Charge (£60,000–£80,000 for 2026-27). Pension sacrifice reduces adjusted net income, potentially preserving Child Benefit.

From April 2029, pension salary sacrifice above £2,000/year will become subject to National Insurance. This reform does not affect the current tax year but may change the calculus for future bonuses.

Breakdown
ComponentCashSacrificeΔ
Gross taxable pay£70,000£60,000-£10,000
Income tax£15,432£11,432-£4,000
Employee NI£3,411£3,211-£200
Employer NI saving£0£1,500£1,500
Passed to your pension£0£0£0
Take-home + pension£51,157£55,357+£4,200
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Frequently asked questions

What is bonus sacrifice?
Bonus sacrifice is an arrangement where you agree with your employer to redirect some or all of an annual bonus straight into your pension before it is taxed. It removes the bonus from your taxable pay, so you save both Income Tax and employee National Insurance. Many employers also add part of their employer NI saving (15% in 2025-26 and 2026-27) to your pension pot.
Why is bonus sacrifice so valuable between £100,000 and £125,140?
In this income band, every £2 you earn removes £1 of your Personal Allowance, producing an effective 60% income tax rate (62% once employee NI is added, or 69.5% in Scotland). Sacrificing this slice of income into pension restores the allowance and delivers roughly 60p of free value per £1 sacrificed.
How much of my bonus can I sacrifice?
You can sacrifice up to 100% of the bonus, subject to two limits: your combined pension input must stay below the £60,000 Annual Allowance (or your tapered allowance for high earners), and the remaining pay must not fall below the National Minimum Wage. Carry-forward from the previous three tax years can raise the effective allowance.
Is bonus sacrifice changing?
The Autumn Budget 2025 announced that from April 2029, pension salary sacrifice above £2,000/year will become subject to National Insurance. The NI savings on bonuses above that threshold will disappear. Income Tax relief on pension contributions is unaffected.
Does bonus sacrifice affect my mortgage application?
A lower taxable salary can reduce the income figure that lenders use to calculate affordability. If you're applying for a mortgage, check with your lender about how they treat pension contributions before committing to a large sacrifice.

Official sources

Reviewed April 2026 · 2026-27 rates (2025-26 / 2024-25 also supported)

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