Salary sacrifice is far easier to grasp with real figures in front of you, so this page works through examples for the three main schemes. Each one shows the before and after: what happens to gross pay, take-home pay, and the tax and National Insurance saved. The figures use current rates for England, Wales and Northern Ireland and are rounded to keep them clear. Treat them as illustrations, then use the calculator or ask us for your exact numbers. This page sits under our salary sacrifice service.
These examples support our salary sacrifice service. To try your own numbers, use the salary sacrifice calculator.
Pension: a worked example
An employee earning £35,000 sacrifices £3,000 a year (£250 a month) into their workplace pension. Here is the effect, using 2025/26 rates:
| Per year | Without sacrifice | With sacrifice |
|---|---|---|
| Gross salary | £35,000 | £32,000 |
| Income tax | £4,486 | £3,886 |
| Employee National Insurance | £1,794 | £1,554 |
| Take-home pay | £28,720 | £26,560 |
| Into the pension | £0 | £3,000 |
The employee puts £3,000 into their pension, but take-home pay falls by only £2,160, because they save £600 in income tax and £240 in National Insurance. In other words, £3,000 of pension saving costs them £2,160. The employer also saves £450 in employer National Insurance, which many employers add straight into the pension.
Electric car: an illustration
An employee earning £40,000 takes an electric car through salary sacrifice for £6,000 a year (£500 a month). Electric cars carry a very low benefit-in-kind charge, so the small amount of tax on the benefit is easily outweighed by the saving on the sacrifice:
| Per year (illustration) | Amount |
|---|---|
| Salary sacrificed | £6,000 |
| Income tax and National Insurance saved | about £1,680 |
| Tax on the benefit in kind (low for EVs) | about £240 |
| Net cost of the car | about £4,560 (roughly £380 a month) |
That is for a brand-new electric car with running costs usually bundled in, often less than an equivalent personal lease. The exact figure depends on the car's list price and its benefit-in-kind band, which is why we work it out properly. See the electric car page for how it is taxed and reported.
Cycle to work: an illustration
An employee earning £28,000 gets a £1,000bike through the cycle to work scheme, sacrificed over a year:
| Over the hire year | Amount |
|---|---|
| Bike value sacrificed | £1,000 |
| Income tax and National Insurance saved | about £280 |
| Net cost to the employee | about £720 |
| Employer National Insurance saved | about £150 |
A £1,000 bike for around £720, spread across the year. See the cycle to work page for how the scheme runs.
How to read these
The pattern is the same in every case. You give up a slice of gross pay, you stop paying tax and National Insurance on that slice, so your take-home pay falls by less than the amount sacrificed, and the difference is your saving. For a basic-rate taxpayer the saving is roughly 28p per £1; for a higher-rate taxpayer it is more. The employer saves employer National Insurance on top.
Your exact figures
These examples are rounded illustrations. Your real numbers depend on the salary, the scheme, the tax code and, for cars, the exact benefit-in-kind band, and every sacrifice has to be checked against the minimum wage. We work them out precisely and run them through payroll. We are a South Wales payroll bureau with more than 60 years of combined experience, CIPP members and Chartered Accountants (ICAEW). For your exact figures, talk to us about your payroll or try the calculator.