⚠ April 2029 Salary Sacrifice NIC Cap — Autumn Budget 2025
From 6 April 2029, only the first £2,000 of pension contributions via salary sacrifice are exempt from NICs.
Contributions above £2,000 will attract both Employer NI (15%) and Employee NI (8%/2%) —
significantly reducing the efficiency of large sacrifices. Income Tax relief is unaffected.
Inside IR35 — Umbrella Company: You are treated as an employee for tax purposes.
Employer's NI (15% above £5,000), Apprenticeship Levy (0.5%), and umbrella fees are all deducted from your assignment rate
before you receive any pay. Pension sacrifice reduces your taxable income, saving Income Tax and Employee's NI.
Contract Details
Used to calculate umbrella fee (charged weekly)
Most umbrellas retain holiday pay separately
Recommended Annual Pension Sacrifice
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— per month
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Monthly Net Take-Home
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Annual Pension Contribution
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Tax & NI Saved vs No Sacrifice
Manual Adjustment
£0
Drag to explore different contribution levels
Student Loan Repayments
Select your repayment plan:
Plan 1
Threshold £24,990 9% above
Plan 2
Threshold £27,295 9% above
Plan 4
Threshold £31,395 9% above (Scotland)
Plan 5
Threshold £25,000 9% above
Postgrad
Threshold £21,000 6% above
Plan 1 + PG
Both loans combined
Repayments are calculated on gross income after pension sacrifice — salary sacrifice reduces your student loan deduction too.
Child Benefit (HICBC)
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The High Income Child Benefit Charge (HICBC) claws back Child Benefit at 1% per £200 of income above £60,000 — fully withdrawn by £80,000. Pension sacrifice reduces your adjusted net income, potentially recovering some or all of your Child Benefit.
2025/26 rates: £26.05/wk for eldest child · £17.25/wk per additional child.
⚠ High Income Child Benefit Charge — Your income is in the HICBC taper zone (£60,000–£80,000). You are losing of Child Benefit per year. Increasing pension sacrifice to bring your adjusted net income below £60,000 would fully restore your Child Benefit.
⚠ Personal Allowance Taper Zone — Your taxable income falls between £100,000 and £125,140. Your Personal Allowance is being reduced by £1 for every £2 above £100,000, creating an effective 60% marginal tax rate in this band. Increasing your pension sacrifice to bring income below £100,000 could recover your full Personal Allowance and significantly reduce your tax bill.
Full Breakdown
Annual Summary
Common Questions
How is inside IR35 take-home pay calculated through an umbrella company?
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Your assignment day rate is first reduced by costs that come off the top before you receive any pay: Employer's NI (15% on earnings above £5,000), the Apprenticeship Levy (0.5%), and your umbrella company fee. What remains is your gross employee pay. From that, income tax (20% / 40% / 45%) and employee NI (8% up to £50,270, then 2%) are deducted via PAYE — leaving your net take-home. This calculator shows every line of that calculation instantly.
How much does pension salary sacrifice save inside IR35?
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Pension salary sacrifice reduces your gross taxable pay before income tax and employee NI are calculated. A basic-rate (20%) taxpayer saves 28p per £1 sacrificed (20% tax + 8% NI). A higher-rate (40%) taxpayer saves 48p per £1. For income in the Personal Allowance taper zone (£100,000–£125,140), where the effective rate is 60%, the saving reaches 68p per £1. The optimal sacrifice amount depends on your rate, days worked, and target monthly income — which this calculator finds automatically.
What is the difference between inside and outside IR35 take-home pay?
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Inside IR35 through an umbrella company means you are taxed as an employee. Employer's NI (15%) is effectively deducted from your rate before you see any pay. A £500/day contractor working 220 days inside IR35 could take home £40,000–£55,000 depending on pension sacrifice. Outside IR35 via a limited company avoids employer's NI and allows dividend extraction at lower rates — typically 15–25% more take-home for the same day rate, though this depends on personal tax circumstances.
Does pension sacrifice reduce my student loan repayments?
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Yes. Student loan repayments are calculated on your gross income after pension salary sacrifice. Increasing your pension contribution reduces the income on which repayments are assessed — so you may save an additional 9% on any income brought below your plan threshold. This compound benefit is reflected in the full breakdown below the calculator.
How does the High Income Child Benefit Charge (HICBC) work inside IR35?
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The HICBC claws back Child Benefit at 1% per £200 of adjusted net income above £60,000, fully withdrawn at £80,000. As an umbrella contractor inside IR35, pension sacrifice directly reduces your adjusted net income — meaning increasing your pension contribution can partially or fully restore Child Benefit you would otherwise lose. Enable the Child Benefit toggle above to see the exact impact on your take-home pay.