UK Bonus Sacrifice Calculator
Cash now, or into your pension? Enter your salary and bonus to see exactly how much take-home you'd give up versus how much lands in your pension — including the £100k trap, Child Benefit rescue, and the employer NI saving many firms add on top.
Why a sacrificed bonus beats a cash bonus
A cash bonus is just extra salary — taxed at your marginal rate plus employee National Insurance. Sacrifice it into your pension and none of that tax applies, because the money never becomes salary in the first place. The gap is large, and it's largest exactly where people need it most.
| Your band | Cash bonus keeps | Sacrifice puts in pension* |
|---|---|---|
| Higher rate (£50k–£100k) | 58p per £1 (42% lost) | £1.14 per £1 |
| £100k–£125,140 trap | 38p per £1 (62% lost) | £1.14 per £1 |
| Additional rate (£125k+) | 53p per £1 (47% lost) | £1.14 per £1 |
| £60k–£80k with 2 kids | ~50p per £1 (HICBC) | £1.14 per £1 |
*Assuming employer passes on their 13.8% NI saving. Without it, £1.00 per £1.
In the £100k trap, the contrast is stark: keep 38p as cash, or put £1.14 into your pension. That's three times the value for the same gross bonus — before you count any tax-free growth or the 25% tax-free lump sum at retirement.
The Child Benefit stack
If your income sits in the £60,000–£80,000 band and you have children, sacrifice does something extra: it pulls your adjusted net income down, which recovers Child Benefit lost to the High Income Child Benefit Charge. For a parent of two, sacrificing enough bonus to get back under £60,000 recovers ~£2,200 of Child Benefit on top of the Income Tax and NI saved — pushing the effective return past 80%.
The employer NI bonus most people miss
When you sacrifice, your employer stops paying their 13.8% employer National Insurance on that money. Many employers add some or all of that saving straight into your pension. On a £20,000 sacrifice that's up to £2,760 of completely free money — but only if your scheme offers it. It's the single most valuable question to ask your payroll team, and most people never do.
Uses 2024/25 UK tax rules (rest-of-UK and Scottish bands, employer NI at 13.8%). Not personal financial advice. Pension money is locked until age 55 (57 from 2028). Check the Annual Allowance and your scheme's rules before a large sacrifice.
Model your whole year, not just the bonus
The £100k Trap Escape Toolkit has a dedicated bonus-timing sheet that models sacrificing across two tax years, combined with salary sacrifice and SIPP top-ups, to find the optimal split on your actual numbers. £19 one-off, 7-day refund, free 2025/26 update.
Frequently asked questions
What is bonus sacrifice?
Bonus sacrifice (a form of salary sacrifice) is where you agree with your employer to give up some or all of your bonus in exchange for an equivalent employer pension contribution. Because the money never becomes salary, you pay no Income Tax and no National Insurance on the sacrificed amount — and your employer saves their 13.8% employer NI too, which many employers add to your pension on top.
Why is sacrificing a bonus so tax-efficient?
A cash bonus is taxed at your marginal Income Tax rate plus employee NI. For a higher-rate taxpayer that's 42% (40% + 2%); in the £100,000–£125,140 band it's an effective 62% (40% + 20% Personal Allowance taper + 2% NI). Sacrifice the bonus instead and none of that applies — the full amount lands in your pension. In the £100k trap, giving up £1 of take-home can put £2–£2.60 into your pension once you add the employer NI saving.
Does my employer have to add their NI saving to my pension?
No — it's optional and varies by employer. When you sacrifice, your employer saves 13.8% employer NI on the amount. Some employers pass 100% of that saving into your pension, some pass part, and some keep it. It's always worth asking: on a £10,000 sacrifice, a full pass-through adds £1,380 to your pot for free. Tick the box in the calculator to see the difference.
Can bonus sacrifice rescue my Child Benefit?
Yes. The High Income Child Benefit Charge claws back Child Benefit once adjusted net income exceeds £60,000, fully gone by £80,000. Because sacrifice reduces your adjusted net income pound-for-pound, sacrificing enough bonus to get back under £60,000 can recover the entire Child Benefit — on top of the Income Tax and NI you save. For a parent of two, that's an extra ~£2,200 of value stacked on top.
Is there a limit to how much bonus I can sacrifice?
Two limits apply. First, the pension Annual Allowance (£60,000 in 2024/25, plus any carry forward) caps total tax-relieved contributions. Second, sacrifice can't take your cash pay below the National Minimum Wage. Beyond that, you can sacrifice 100% of a bonus if you want — subject to your employer's scheme rules. If your total contributions would exceed the Annual Allowance, check carry forward first.
What's the catch — when is cash better?
Pension money is locked until age 55 (rising to 57 from 2028). If you need the cash now — for a house deposit, debt, or an emergency fund — take it as cash despite the tax hit. Sacrifice also slightly reduces earnings-linked benefits (statutory maternity/paternity pay, mortgage affordability assessments, life cover based on salary). For most higher-rate earners who don't need the money immediately, though, the maths overwhelmingly favours sacrifice.
How is the pension money taxed later?
When you draw the pension, 25% is tax-free (up to the Lump Sum Allowance) and the rest is taxed as income at your marginal rate then — usually basic rate for most retirees. So a higher-rate earner who sacrifices at 42–62% relief and later draws at an effective 15% (25% tax-free + 75% at 20%) captures a large permanent tax arbitrage, before you even count the tax-free growth inside the pension.
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