Salary Sacrifice Pension UK: The Complete 2026 Guide

Salary sacrifice swaps gross salary for an employer pension contribution, saving income tax and 8% employee NI

Many employers also pass back their 15% employer NI saving, which lands directly in your pension

For earners between £100k and £125,140 it can recover the full personal allowance and deliver around 67% effective relief

Watch out for impacts on mortgage affordability, life cover, statutory pay, and the national minimum wage floor