Bonus Sacrifice Calculator
Compare taking your bonus as cash vs sacrificing it into your pension — 2025/26 & 2026/27
Last updated: June 2026
Sacrificing your bonus into your pension can be one of the most tax-efficient moves a UK employee makes. Instead of taking your bonus as cash — where it is hit by Income Tax plus employee National Insurance — you can ask your employer to pay it straight into your workplace pension under a salary (bonus) sacrifice arrangement. Because the money never counts as your earnings, you avoid Income Tax and employee NI on it, and your employer also saves 15% employer NI, which many employers add to your pot.
This calculator compares two scenarios side by side for the 2025/26 and 2026/27 tax years (the figures are identical): taking the bonus as cash versus sacrificing it into your pension. It is built for higher-rate and additional-rate earners, anyone near the £100,000 personal-allowance trap, and basic-rate employees who simply want to grow their pension faster. Enter your salary, your bonus and how much of the bonus you want to sacrifice, and it shows your net cash, the total landing in your pension, the tax and NI saved, and your effective saving rate.
Bonus Sacrifice Calculator
How the bonus sacrifice calculator works
When you receive a cash bonus, it sits on top of your salary and is taxed at your highest marginal rate. For most higher earners that means 40% Income Tax plus 2% employee National Insurance on the part above the £50,270 Upper Earnings Limit — so 42p of every £1 disappears. Basic-rate earners lose 20% tax plus 8% NI (28p in the £).
Under a bonus sacrifice, you contractually give up the bonus before it is paid and your employer pays the equivalent into your pension. Because it is never your earnings:
- You pay no Income Tax on the sacrificed amount.
- You pay no employee National Insurance on it.
- Your employer saves 15% employer NI (on the amount above their £5,000 secondary threshold), which many employers add to your pension.
The calculator works out your tax and NI with and without the bonus by comparing total earnings, so the marginal rate is applied correctly even when the bonus straddles a tax band. It also tracks the £50,270, £100,000 and £125,140 thresholds, because near £100,000 the withdrawal of your Personal Allowance creates an effective 60% marginal rate where sacrifice is worth the most.
Worked example
Olivia earns a £60,000 salary and receives a £10,000 bonus, and she sacrifices 100% of it into her pension.
- As cash: the whole £10,000 sits in the 40% higher-rate band and above the £50,270 NI upper limit. Income Tax = £10,000 × 40% = £4,000; employee NI = £10,000 × 2% = £200. Net cash = £5,800.
- Sacrificed: the full £10,000 goes into her pension. She saves £4,000 tax and £200 NI — an effective saving of 42%. If her employer also passes on its 15% NI saving (£1,500), £11,500 lands in her pension.
So Olivia gives up £5,800 of net cash but gains £10,000–£11,500 of pension value — roughly double the money working for her retirement, tax-free until drawn.
Frequently asked questions
Is sacrificing my bonus into a pension worth it?
For most higher-rate and additional-rate taxpayers it is highly tax-efficient: you avoid 40% or 45% Income Tax and 2% NI, and often gain your employer's 15% NI saving too. The trade-off is that the money is locked in a pension until at least age 55 (rising to 57 from 2028). Basic-rate earners still save 20% tax and 8% NI.
How much tax and NI does bonus sacrifice save?
A higher-rate earner saves 40% Income Tax + 2% employee NI = 42% of the sacrificed bonus. A basic-rate earner saves 20% + 8% = 28%. Around the £100,000 mark, where the Personal Allowance is tapered away, the effective saving can reach 60% before any employer NI top-up.
Does my employer have to add their NI saving to my pension?
No — it is optional. Some employers keep the 15% employer NI saving, others pass on all or part of it to your pension. Use the dropdown above to model both. Always check your scheme rules, as it can make a large difference to the final pot.
Can sacrificing a bonus reduce my Personal Allowance trap?
Yes. If your salary plus bonus would push your adjusted net income over £100,000, sacrificing the bonus reduces the income that counts, so you can keep some or all of your £12,570 Personal Allowance and avoid the 60% effective marginal rate between £100,000 and £125,140.
Source: figures from GOV.UK — Income Tax rates and Personal Allowances and National Insurance rates and categories (2025/26 and 2026/27). This tool gives estimates only and is not financial advice.
Related UK calculators
- Bonus Tax Calculator — see the tax and NI on a cash bonus.
- Salary Sacrifice Pension Calculator — sacrifice regular salary, not just a bonus.
- Salary Calculator — full take-home pay breakdown.
- Pension Pot Calculator — project your retirement pot over time.
- All UK Calculators — browse every tool.