Pension Salary Sacrifice 2029 Calculator
See how the April 2029 £2,000 National Insurance cap will change your salary sacrifice savings, for both employee and employer. Indicative figures based on the rules announced at the Autumn Budget 2025.
Your details
National Insurance: now vs April 2029
| Now | From April 2029 | Change | |
|---|---|---|---|
| Employee NI saving | £96 | £40 | -£56 |
| Employer NI saving | £720 | £300 | -£420 |
Income tax relief on the whole contribution is unchanged. Only the National Insurance treatment of the amount sacrificed above £2,000 changes from April 2029.
Across your workforce
A rough estimate if this salary and contribution applied to your whole team. Real figures vary by individual salary and contribution level.
Indicative only, based on the rules announced at the Autumn Budget 2025 and 2026/27 National Insurance rates.
What is changing in April 2029?
From 6 April 2029, the first £2,000 of pension contributions made through salary sacrifice each year will continue to be free of National Insurance for both the employee and the employer. Anything sacrificed above £2,000 a year will be treated like an ordinary pension contribution, attracting both employee National Insurance (8% within the main band, 2% above it) and employer National Insurance (15%). Income tax relief on the whole contribution is unchanged.
Why these figures are indicative
The £2,000 cap was announced at the Autumn Budget 2025, but the detailed rules are not yet finalised and could change before April 2029. This calculator assumes the cap applies to the salary the employee sacrifices and uses 2026/27 National Insurance rates, which may also differ by 2029. Treat the results as a planning guide, not advice, and confirm your position with your accountant or payroll provider.
What you can do now
There is no need to unwind salary sacrifice arrangements. The first £2,000 keeps its National Insurance saving, the income tax relief is unchanged, and the change is still some years away. The sensible step is to model the impact on your higher earners and high contributors ahead of time. Our guide to the 2029 salary sacrifice changes explains who is affected and what to do, and our salary sacrifice calculator shows the current savings on any salary and contribution.
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What is the 2029 salary sacrifice pension change?
From 6 April 2029, only the first £2,000 of pension contributions made through salary sacrifice each year will stay free of National Insurance. Anything sacrificed above £2,000 will attract both employee and employer National Insurance again. The change was announced at the Autumn Budget 2025. Income tax relief on the whole contribution is unchanged.
How accurate is this calculator?
It gives an indicative estimate. The £2,000 cap is confirmed, but the detailed rules are not yet finalised and may change before April 2029. The figures assume the cap applies to the amount of salary the employee sacrifices, and they use 2026/27 National Insurance rates, which may also differ by 2029. Use it as a guide, then confirm with your accountant or payroll provider.
Who is most affected by the 2029 cap?
Middle and higher earners, and anyone contributing a larger percentage of their salary, because their annual sacrifice runs well above £2,000. Employees on the statutory minimum contribution, especially where it is calculated on qualifying earnings rather than full pay, often sit below the cap and see little or no change.
Does the 2029 change affect income tax relief?
No. The change is to National Insurance only. Income tax relief on pension contributions is unchanged, so the income tax advantage of paying into a pension through salary sacrifice continues in full, whatever the amount.
Should we stop offering pension salary sacrifice?
Not for most employers. The first £2,000 keeps its National Insurance saving, the income tax relief is unchanged, and the change is still some years away. It pays to model the impact on your higher earners and high contributors ahead of time, which is what this calculator is for, rather than unwinding arrangements now.
