£35,000 with a 5% pension keeps £2,297 a month under relief at source — compared against net pay and salary sacrifice on the same salary.
A pension contribution reduces the pay you receive, but by how much depends on which of three methods your scheme uses. Relief at source takes it after tax and the provider reclaims basic-rate relief; net pay takes it before Income Tax is worked out; salary sacrifice reduces contractual pay itself. Only salary sacrifice also reduces the pay employee National Insurance is charged on.
Enter your salary and contribution rate. Tax relief means the take-home cost is less than the amount paid in.
Of £35,000.00 gross a year: Income Tax £4,486.00, National Insurance £1,794.40, Pension £1,150.40, Take-home £27,569.20.
£1,150 leaves your pay, tax relief adds £288, and £1,438 goes into the pension. That is 5% of the £28,760 of your salary that counts as qualifying earnings.
Saving £115 a month — about 5% of this take-home — becomes £7,610.59 in five years at an example 4%: try the savings calculator.
2026/27 rates, England, Wales and Northern Ireland, no student loan. Open the full calculator to change region, student loan or pension method.
Payslip showing different figures? The payslip checker works out what your pay and tax code should have produced and shows which assumption could explain the gap.
| Tax/source year | 2026/27 |
|---|---|
| Region | England/Wales/Northern Ireland |
| Tax code basis | 1257L where the page uses PAYE defaults |
| Pension basis | No pension deduction unless this example says otherwise |
| Student loan basis | No student loan unless selected in this example |
| Gross pay | Employment pay before PAYE deductions and pension or loan settings. |
|---|---|
| Income Tax | Tax estimated from the selected tax-year, region, tax code and taxable-pay assumptions. |
| National Insurance | Employee NI is calculated separately from Income Tax and may not follow the same bands. |
| Pension and loans | Pension method and student-loan plan can change take-home pay and payslip comparisons. |
| Pension contribution | Changing the rate or method can change taxable income, National Insurance and take-home pay. |
|---|---|
| Tax code and region | Scottish Income Tax, Welsh codes, emergency tax or a non-standard tax code can move the result. |
| Student loan plan | A different plan can change deductions because each plan uses its own threshold and repayment rate. |
| Bonus, overtime or second job | Extra pay and payroll timing can make a real payslip differ from the smooth annual estimate. |
| Tax code | HMRC tax-code changes, K codes, BR/D codes, or emergency markers can change PAYE deductions. |
|---|---|
| Cumulative basis | Week 1, Month 1 or non-cumulative payroll can differ from a smooth annual calculator estimate. |
| Pension method | Relief at source, net pay and salary sacrifice can affect taxable pay and take-home pay differently. |
| Payroll timing | Bonus, overtime, arrears, refunds, cut-off dates and corrections can all move a single payslip. |
| Why is the tax on my payslip higher than expected? | payslip difference |
|---|---|
| What do the main payslip lines mean? | payslip explainer |
| What tax code should I use for modelling? | tax code |
| How much does pension reduce take-home pay? | pension comparison |
| How does this affect a monthly budget? | budget planning |
| What is not decided here | PayBreakdown does not decide payroll correctness, lender approval, benefit entitlement or employer compliance, and does not give regulated financial, mortgage, debt, tax, payroll or legal advice. |
|---|
The figures on this page are worked from pension take-home, using the values below. Open the calculator if your example salary differs.
All three end with money in a pension. They differ in which payslip line moves, and that is what decides the take-home difference.
The estimate above models relief at source, and it works the contribution out on qualifying earnings rather than on your whole salary. That is what the hint beside the contribution box says. There is no method selector here, so net pay and salary sacrifice cannot be switched on in the box itself. The comparison below runs the same engine at the same salary and rate under all three methods instead, so the page and the box cannot disagree.
Every figure here comes from the same engine as the calculator above, at £35,000 a year and 5%, England, standard tax code, no student loan, 2026/27 rates. Read the pension amount and the take-home amount together, because the method that leaves the most in your pocket is also the one that puts the least in the pot.
Take-home is £250 higher under relief at source than under net pay in that comparison, and that is not a saving. It is the effect of a smaller contribution: £1,438 reaches the pension under relief at source against £1,750 under net pay, and the take-home difference is what is left of that gap once basic-rate relief is taken off it. Put the same cash amount in under either method and the net cost per pound reaching the pension is the same.
Salary sacrifice differs on substance rather than on timing. Contractual pay falls, so employee National Insurance is charged on a smaller figure. The gap against net pay is the sacrificed amount multiplied by the employee National Insurance rate applying to that slice of pay, and nothing else, which is why the Income Tax figures for the two methods match exactly. On the part of pay above the upper earnings limit a lower National Insurance rate applies, so the saving on that slice is smaller.
Automatic enrolment sets its minimum contributions on a slice of pay called qualifying earnings: the part of gross pay above a lower limit and up to an upper limit, both set for the tax year. In 2026/27 that band runs from £6,240 to £50,270, so on £35,000 the band is £28,760 rather than the whole salary. Working on a band keeps one minimum percentage comparable across very different salaries. Which basis a scheme uses is a separate question from which relief method it uses, and a scheme may use a better basis such as full basic pay, which is why a payslip percentage can look right while the cash amount does not match.
Sacrifice depends on an employer scheme and on a change to your contract, so it is not something you can switch on by yourself. Reducing contractual pay can lower statutory maternity, paternity and sick pay, contribution-based benefits, and the salary figure a lender or referencing agency works from. It also cannot take cash pay below the National Minimum Wage or National Living Wage for the pay period, and this page does not check that floor for you.
This is a modelling tool. It estimates a payslip under the assumptions stated above and does not confirm that your scheme is run the way you assume. It does not model the annual allowance, which caps what can be paid into all your pensions with tax relief in one tax year, and it does not model an employer contribution, which is money on top of anything shown here.
Pension salary examples start with a gross annual salary, apply a stated pension percentage, then show the estimated take-home pay after Income Tax, employee National Insurance and the pension deduction under the page assumptions.
Use a pension example when the starting question is a specific salary plus a specific pension contribution rate. Use the salary-sacrifice calculator when the arrangement reduces contractual salary or cash pay.
This estimate is worked out on £35,000 annual gross. Change any of those and the take-home figure moves; pension method and student loan plan usually move it most. A payslip can differ from any calculator because payroll works pay period by pay period, so a tax-code change, a bonus, arrears or a refund can land in one month and not the next. See how each deduction is worked out.
Frequent salary examples with a 5% pension contribution assumption.
Useful examples where changing the pension percentage can noticeably move take-home pay.
Move from ordinary pension contribution examples into salary-sacrifice modelling where scheme rules allow it.
Change the pension method, rate or wrapper and see what it does to take-home pay.
Compare gross pay with taxable pay on the payslip. Under relief at source the two match, because the contribution is taken after the tax has been worked out. Under net pay, taxable pay is lower than gross by the contribution while National Insurance is still charged on the full figure. Under salary sacrifice there is usually no employee pension deduction line at all, because gross pay itself is already lower and the employer pays the contribution.
Not by yourself. The method is a property of the scheme your employer chose and it applies to everyone in that scheme. Some employers run more than one arrangement, in which case payroll or the scheme administrator can say which one you are in, but moving between them is an employer decision rather than a payslip setting.
Under net pay and salary sacrifice, yes: taxable pay is already lower before the tax calculation runs, so nothing needs claiming. Under relief at source, the provider adds only basic-rate relief to the pot. Anything above that is claimed from HMRC, through Self Assessment or by contacting them, and it comes back to you as tax rather than going into the pension.
No. It is fixed to relief at source, so the Income Tax and National Insurance it shows are worked out on full gross pay with neither of them reduced. Entering a salary you have already sacrificed from does not stand in for it either: you would get the lower tax and National Insurance, but the calculator would then take a further relief-at-source contribution out of that reduced figure. The three-method figures on this page are computed separately for that reason.
No. Pension salary examples use the pension method stated on the page, while salary sacrifice changes cash pay and can affect National Insurance, statutory pay, minimum-wage guardrails, benefits and employer scheme rules.
Each pension example answers one fixed salary and pension-rate question. Open the calculator when you need to change tax code, region, student loan, pension method, bonus or other income.
Last updated 2026-08-27. Checked by Sean Elsmore. Rates last checked against GOV.UK on 2026-08-07. Estimates are for planning and should be checked against official records where the decision matters.