Holiday Buy Salary Sacrifice Calculator 2025/26

A holiday buy salary sacrifice scheme lets employees purchase extra annual leave by temporarily reducing their salary. Because the salary is reduced before tax and National Insurance, the employee saves both income tax and NIC — making each extra day more affordable than if they simply weren't paid.

Most employer schemes allow buying between 1 and 5 extra days per year (on top of your contractual entitlement). Some schemes also allow selling holiday. The arrangement must be agreed with your employer each year.

Salary sacrifice reduces your pensionable pay (if the scheme uses contractual pay as the basis), which can slightly reduce employer and employee pension contributions. Check your pension scheme rules. Some employers explicitly exclude sacrifice arrangements from pension calculations.

Yes. If the salary sacrifice takes your effective hourly rate below the National Living Wage (£12.21/hour from April 2025), the sacrifice is not lawful. Employees on low salaries should check with HR before joining a holiday buy scheme.

No — the additional leave itself is not a taxable benefit. The tax efficiency comes from the salary sacrifice mechanism reducing gross pay before PAYE and NIC are applied.

Holiday buy means sacrificing salary to get extra leave days. Holiday sell means receiving extra pay in lieu of untaken annual leave above the statutory minimum (28 days). Both can be structured as salary sacrifice. Selling statutory leave (the first 28 days) is generally not permitted under working time regulations.

Yes — employer NIC at 15% is also saved on the sacrificed amount (salary above £5,000 secondary threshold from April 2025). This is why many employers offer holiday buy schemes — both employee and employer benefit from NIC savings.

The standard method is: annual salary ÷ number of working days in the year (typically 260 = 52 weeks × 5 days). Some employers use a different divisor (e.g. 365 or 52). Check your scheme documentation to confirm the exact daily rate.