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Salary Exchange Calculator

Salary exchange (also referred to as salary sacrifice), is where someone gives up part of their salary in return for a non-cash benefit, often a pension contribution.

The main advantage is to maintain existing pension contributions level at a lower cost or increase pension contributions at no extra cost

Employer savings can also be achieved depending on the amount of employers national insurance savings passed on to the member.

This calculator allows you to enter details of your client’s salary, personal (RAS) pension contributions and employers pension contribution.

The calculation options available are:

  • sacrifice required to maintain pension contributions level at a lower cost,
  • sacrifice required to increase pension contributions at no extra cost,
  • freeform entry to model different scenarios

The calculator produces outputs in both table and graphical formats and provides full calculations of the pre and post salary exchange positions.

Further information on salary sacrifice is also available in the 'what is a salary sacrifice: arrangement of guidance' section on the HMRC website.

Hints & tips

  • You can save the outputs as an electronic PDF copy by printing to a PDF printer. There are several available to download including PDF Forge, which is free. This allows the webpage to convert to a PDF document.
  • You can remove the header/footer from printed outputs to make it look more like a traditional report.
  • You can add the Income Choice Annuity demonstrator to your favourites to easily link to it the future and even access this when not connected to the internet.

For more information, please download our PruAdviser WebApp guide.

Please note: The hints & tips are suitable for Internet Explorer. Internet browsers operate in different ways so please refer to your browser help guide for more information on the above hints & tips.

This calculator is based on our understanding of current taxation, legislation and HM Revenue & Customs practice, all of which is subject to change without notice. The impact of taxation and any other reliefs depends on individual circumstances. Calculator results are illustrative only and are in no way intended to be a recommendation for a particular course of action or constitute advice.

For UK Adviser Use Only - Not Approved For Use With Clients