Find the real cost of buying extra annual leave through salary sacrifice — after income tax and NI savings. See how much each extra day actually costs you.
Calculate Your Holiday Sacrifice Saving
Enter your salary details and the number of extra days you want to buy. The calculator shows the face value, your tax and NI savings, and the real net cost of each extra day off.
Your Holiday Sacrifice Analysis
Based on 2025/26 income tax and NI rates. Estimates only.
£0
Face Value of Extra Leave
£0
Your Daily Rate
£0
Income Tax Saving
£0
Employee NI Saving
£0
Net Cost After Savings
£0
Effective Daily Rate
£0
Employer NI Saving
0%
Total % Saving
£0
Monthly Take-Home Reduction
How Buying Extra Leave Through Salary Sacrifice Works
Holiday purchase schemes let you trade part of your salary for extra annual leave days. Because the sacrifice happens before tax and National Insurance are calculated, the effective cost of each extra day is significantly lower than your daily rate.
The Saving Mechanism
Your daily rate = annual salary ÷ working days per year
Cost of extra days = daily rate × number of days bought
Via salary sacrifice, your salary is reduced by this cost before tax
You save income tax at 20% or 40% on that reduction
You save employee NI at 8% (below Upper Earnings Limit) or 2% (above)
Example — £35,000 salary, 5 extra days, basic rate (20%):
Daily rate: £134.62 | 5 days cost: £673.08
Tax saving (20%): £134.62 | NI saving (8%): £53.85 Net cost: £484.62 — just £96.92 per extra day off (28% discount)
Higher Rate Taxpayer Saving
At 40% income tax and 2% NI above the Upper Earnings Limit:
A £1,000 face-value leave purchase costs only £580 net (42% discount)
Each extra day becomes significantly cheaper relative to your normal take-home
Higher earners benefit most from salary sacrifice holiday schemes
Example Savings by Salary
Annual Salary
Days Bought
Face Value
Net Cost (Basic Rate)
Net Cost (Higher Rate)
£25,000
5
£480.77
~£346
N/A
£35,000
5
£673.08
~£485
N/A
£50,000
5
£961.54
~£693
~£557
£60,000
5
£1,153.85
N/A
~£668
* Assumes 260 working days/year. NI assumes earnings below or above Upper Earnings Limit as appropriate. Figures are approximate.
Frequently Asked Questions
How does buying extra annual leave through salary sacrifice work?
Your employer deducts the cost of additional leave days from your gross salary before tax and NI are calculated. This means you save income tax and employee NI on the cost of those days. The effective price of each extra day off is lower than its face value because of these tax savings.
How many extra days can I buy?
This depends on your employer's scheme. Most employers allow between 1 and 10 additional days per year. The total sacrifice cannot reduce your salary below the National Living Wage (£12.21/hour from April 2025 for workers aged 21+), which limits how many days very low-paid workers can buy.
Can I also sell back annual leave?
Many employers with flexible leave schemes allow both buying and selling annual leave. Selling leave means receiving extra salary, which is taxed as normal income — there's no NI saving. Statutory minimum holiday (5.6 weeks = 28 days including bank holidays) cannot be bought or sold under UK law.
Does bought leave affect my pension contributions?
If your pension contributions are calculated as a percentage of contractual salary, and salary sacrifice reduces that salary, your pension contributions (and your employer's) may reduce proportionally. Some schemes protect pension contributions at the pre-sacrifice level. Check with your HR department or scheme documentation.
What daily rate is used to price extra leave?
Most employers calculate the daily cost as your annual salary divided by the number of working days per year — typically 260 working days (excluding weekends and public holidays). Some employers use a different basis such as contractual hours. Always confirm your employer's exact calculation method before making your election.
Is buying extra leave tax-efficient compared to unpaid leave?
For almost all employees, buying leave via salary sacrifice is more tax-efficient than taking unpaid leave. With salary sacrifice, you save income tax and NI on the sacrifice amount. With unpaid leave, you simply lose a day's gross pay and receive no tax benefit. Salary sacrifice always costs you less for the same number of days off.
Does salary sacrifice holiday affect statutory sick or maternity pay?
Statutory payments (SSP, SMP, SPP) are calculated on your post-sacrifice contractual salary. A lower contracted salary could mean lower statutory payments. If you are pregnant or anticipate needing statutory pay, consider this before entering a holiday purchase scheme.
Can I change my election mid-year?
Most employer schemes require elections at the start of the leave year or during an annual open window. Mid-year changes are typically not permitted because a salary sacrifice arrangement requires a formal contract amendment. Check your employer's enrollment process for specific rules.
What happens to purchased leave if I leave the company?
If you have taken more leave than accrued (including purchased leave) when you resign or are dismissed, your employer may deduct the excess from your final salary. If you leave with unused purchased leave, you should receive payment in lieu. The treatment depends on your employment contract and the scheme rules.
Do part-time workers benefit from salary sacrifice holiday?
Yes. Part-time workers can participate, with the daily rate based on their actual annual salary. All the same NMW and minimum leave rules apply. The tax savings work identically regardless of working pattern.
Does buying extra leave affect student loan repayments?
Salary sacrifice reduces your gross income, so it may reduce the income on which student loan repayments are calculated. This could slightly lower your repayments — an additional benefit of salary sacrifice arrangements, though usually a minor one for holiday purchase.
Does the employer save NI when I buy extra leave?
Yes. Employers save 15% NI (from April 2025) on the salary sacrificed for leave purchase, above the £5,000 secondary threshold. Some employers pass this saving to employees as a sweetener — such as offering additional days at a discount. Check with your employer whether they share any of their NI saving through the scheme.
MB
Mustafa Bilgic
Financial Content Writer | Employee Benefits Specialist
Updated: 10 March 2026 | Published: 1 January 2025