From 6 April 2029, pension contributions made through salary sacrifice above £2,000 a year will no longer be free of National Insurance. Enter your salary and your sacrifice to see how much goes over the limit and the extra National Insurance you and your employer could pay, worked out at 2026/27 rates.
Pension contributions, for a full year
Today (2026/27): pension contributions your employer makes in exchange for salary you give up are not subject to Income Tax or National Insurance, and there is no £2,000 limit yet.
The law already passed: the National Insurance Contributions (Employer Pensions Contributions) Act 2026 received Royal Assent on 29 April 2026. It lets regulations treat salary sacrificed for employer pension contributions above a yearly limit as earnings for National Insurance. It has effect from the 2029/30 tax year, which starts on 6 April 2029, and the first regulations must set the limit at £2,000 for a tax year.
Still to come: HMRC's policy paper of 4 December 2025 says details on the design and operation of the £2,000 limit will be set out in secondary legislation. This calculator uses the 2026/27 National Insurance rates and thresholds, and the rates that apply in 2029/30 may be different.
From 6 April 2029, salary you sacrifice for pension contributions above £2,000 in a tax year will attract Class 1 National Insurance for you and for your employer. The first £2,000 keeps its National Insurance relief, and the Income Tax relief on pension contributions is unchanged.
| At 2026/27 rates, on each £1,000 over the limit | You pay | Your employer pays |
|---|---|---|
| Pay after sacrifice between £12,570 and £50,270 | £80 (8%) | £150 (15%) |
| Pay after sacrifice above £50,270 | £20 (2%) | £150 (15%) |
HMRC estimates that 7.7 million employees use salary sacrifice for pension contributions and 3.3 million of them sacrifice more than £2,000. For those affected, it puts the average extra employee National Insurance at £84 in 2029/30, the first year.
On a £45,000 salary with a £4,500 pension sacrifice, £2,500 is over the limit. At 2026/27 rates you would pay 8% on it, £200 a year, and your employer 15%, £375. You would still save £160 a year of your own National Insurance on the first £2,000, compared with £360 today.
See your full saving today with the salary sacrifice pension calculator or the salary sacrifice calculator, check your pay with the take-home after pension calculator, and see your National Insurance with the National Insurance calculator.
A £2,000 yearly limit on pension contributions made through salary sacrifice that stay free of National Insurance. From 6 April 2029, amounts above £2,000 will attract Class 1 National Insurance for both the employee and the employer.
The National Insurance Contributions (Employer Pensions Contributions) Act 2026 has effect from the 2029/30 tax year, which begins on 6 April 2029. Until then, pension salary sacrifice stays free of National Insurance whatever the amount.
The Act received Royal Assent on 29 April 2026 and says the first regulations made under it must set the limit at £2,000 for a tax year. HMRC says the details of how the limit works will be set out in secondary legislation.
No. HMRC says the Income Tax relief on employee and employer pension contributions is unchanged. Only National Insurance changes, and only on the amount above £2,000.
At 2026/27 rates, you pay 8% on the amount over £2,000 while your pay is between £12,570 and £50,270, and 2% on any part above £50,270. Your employer pays 15%. A £4,500 sacrifice on a £45,000 salary would cost you £200 and your employer £375 more a year.
This change is about salary sacrificed for employer pension contributions, which is what the 2026 Act covers. This calculator only looks at pension salary sacrifice.
