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Pensions
Bonus vs pension
Compare a cash bonus with pension salary sacrifice, including tax, NI, student loans and the cash you give up.
Open calculatorEngland / 2026/27
Bonus versus pension calculator
Calculations run in your browser.
Extra cash if you take the bonus
| Gross bonus | £10,000.00 |
|---|---|
| Extra take-home: cash option | £5,800.00 |
| Extra take-home: pension option | £0.00 |
| Extra pension: pension option | £10,000.00 |
| Take-home given up for pension | £5,800.00 |
| Income Tax reduction | £4,000.00 |
| NI reduction | £200.00 |
| Loan repayment reduction | £0.00 |
Annual comparison, not the bonus-month payslip. Pension money is locked away and may be taxed on withdrawal. Employer top-ups, annual-allowance tax charges and childcare/benefit effects are excluded. Loan reductions are not necessarily lifetime savings.
Check the inputs to calculate a result.
Calculation details
Cash and pension outcomes
The cash option adds the bonus to salary. The pension option sacrifices the entered amount and pays any remainder as salary. Existing sacrifice stays the same in both cases. The difference shows cash given up for pension, not a guaranteed investment gain.
Example
On £60,000 with a £10,000 bonus and no loans or existing pension, the cash bonus adds £5,800 to annual take-home. Sacrificing the entire bonus puts £10,000 into the pension instead.
Limits
England 2026/27, one job, standard Personal Allowance and its taper. Annual NI and loan approximations do not reproduce a one-off payroll payment. Other income, benefits, special tax codes and pension contributions are excluded unless explicitly entered. The £60,000 model cap is not an allowance eligibility check. Employer contributions count too; taper, carry-forward and the money purchase annual allowance are not assessed. Pension access restrictions and future withdrawal tax apply.
Sources
- Personal Allowance and adjusted-net-income taper
- Category A rates and annual NI thresholds
- NI normally deducted per pay period
- Separate employment NI liabilities and aggregation exceptions
- Net pay and relief-at-source treatment, 20% provider relief and additional relief limited to higher-taxed income
- Pension salary sacrifice reduces cash pay and NI earnings; minimum-wage restriction
- Gross relief-at-source contributions reduce adjusted net income
- Standard annual allowance includes employer contributions; taper/MPAA may apply
- Section 10(6): relief-at-source extension of basic and higher-rate limits under Finance Act 2004 s192(4)
- Plan thresholds, rates and simultaneous undergraduate/postgraduate deductions
- Loan earnings follow Class 1 NI earnings; pension net pay does not lower loan earnings
- Multiple employers and Self Assessment loan aggregation
- Voluntary repayments may not help before write-off and are not refundable
- Age 21+ National Living Wage £12.71 per hour from April 2026
Checked 2026-10-25. Estimate only, not financial advice.