Salary Sacrifice on £45,000
Salary sacrifice on a £45,000 salary: sacrificing £2,250/year into your pension saves £630 in tax and NI. Your take-home pay reduces by £1,620, meaning every £1 of pension costs you just £0.72 in lost take-home.
If you earn £45,000 and sacrifice £2,250/year (5% of salary) into your pension, you save £630 in income tax and National Insurance. Your take-home pay drops by just £1,620 — meaning every £1 going into your pension only costs you £0.72 in lost take-home. That's an effective 28% boost to your pension contributions.
How the savings break down
- Income tax saving: £450
- Employee NI saving: £180
- Employer NI saving: £337.5 (your employer keeps this, but many pass some to you)
Impact on mortgage borrowing
Salary sacrifice reduces your contractual salary from £45,000 to £42,750. At a typical 4.5x lending multiple, your maximum mortgage drops from £202,500 to £192,375 — a reduction of £10,125. If you're applying for a mortgage soon, consider timing your sacrifice arrangement carefully.
Related calculators
- Full £45,000 salary breakdown — detailed tax bands and deductions
- Pension tax relief calculator — see how much relief you get on contributions
- Mortgage affordability — check how sacrifice affects your borrowing power
- Salary sacrifice calculator — try different amounts and benefits
Frequently asked questions
What is salary sacrifice?
Salary sacrifice (also called salary exchange) is an arrangement where you give up part of your gross salary in exchange for a non-cash benefit, typically a pension contribution. Because the sacrifice happens before tax and NI are calculated, you save on both.
How much do I save with salary sacrifice on £45,000?
Sacrificing £2,250/year (5% of salary) saves you £630 in tax and National Insurance. Your take-home pay only drops by £1,620, so every £1 of pension costs just £0.72.
Does salary sacrifice affect my mortgage application?
Yes. It reduces your contractual salary from £45,000 to £42,750, which lenders use to calculate your borrowing limit. At 4.5x, your maximum mortgage drops by £10,125.
Salary sacrifice savings on £45,000
| Monthly sacrifice | Annual sacrifice | Your saving | Employer NI saving | Take-home reduction/month | Cost per £1 |
|---|---|---|---|---|---|
| £100/month | £1,200 | £336 | £180 | £72 | £0.72 |
| £200/month | £2,400 | £672 | £360 | £144 | £0.72 |
| £500/month | £6,000 | £1,680 | £900 | £360 | £0.72 |