£30,000 salary, 5% sacrificed
Sacrifice £1,500.00 a year, which is under the £2,000 cap, so nothing changes: no extra NI for you or your employer, and you keep the £120.00 NI saving.
Money · Autumn Budget 2026
Salary sacrifice £2,000 cap calculator: your extra NI from April 2029
From 6 April 2029 only the first £2,000 a year of pension contributions made through salary sacrifice will be free of National Insurance, and you and your employer pay NI on the rest (GOV.UK): someone on £50,000 sacrificing 8% (£4,000.00) would pay £160.00 more NI a year and their employer £300.00 more, while income tax relief is unchanged.
£2,000 a yearSalary sacrifice free of NI from 6 April 2029 (GOV.UK)
Extra National Insurance from April 2029
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Enter your salary before salary sacrifice and the share you sacrifice into your pension. If you also sacrifice a bonus into the pension, enter it too. Employee NI category A.
Result
£2,000.00 of your £4,000.00 sacrifice is above the £2,000 cap. From April 2029 you pay £160.00 more NI a year (£13.33 a month) and your employer pays £300.00 more.
| Sacrificed into your pension a year | £4,000.00 |
|---|---|
| Free of NI under the cap | £2,000.00 |
| Above the £2,000 cap (NI due from April 2029) | £2,000.00 |
| Extra employee NI a year | £160.00 |
| Extra employee NI a month | £13.33 |
| Extra employer NI a year | £300.00 |
| Your NI saving from salary sacrifice now | £320.00 |
| Your NI saving from April 2029 | £160.00 |
Uses 2026/27 NI rates (employee 8% and 2%, employer 15% above £5,000). GOV.UK says the £12,570 and £50,270 NI thresholds stay until 2030/31; the 2029/30 rates and the employer threshold are not published yet, so 2026/27 values are an assumption. Income tax is not affected. The detailed rules for the cap will be set in secondary legislation.
Worked answers
Three worked answers from this calculator
Each button loads the amounts into the calculator above.
£50,000 salary, 8% sacrificed
Sacrifice £4,000.00 a year, so £2,000.00 is above the cap. From April 2029: £160.00 more employee NI a year (£13.33 a month) and £300.00 more employer NI. Your NI saving from sacrifice falls from £320.00 to £160.00.
£80,000 salary, 10% sacrificed
Sacrifice £8,000.00 a year, so £6,000.00 is above the cap. From April 2029: £120.00 more employee NI a year (£10.00 a month) and £900.00 more employer NI. Your NI saving from sacrifice falls from £160.00 to £40.00.
GOV.UK rules
How the £2,000 cap works
HMRC: “From 6 April 2029, earnings forgone pursuant to a salary sacrifice scheme above the £2,000 contribution limit for a tax year will be subject to Class 1 primary and secondary National Insurance contributions.”
- What stays the same: contributions through salary sacrifice are still free of income tax (subject to the usual limits), employer pension contributions outside salary sacrifice stay free of NI, and you can still sacrifice more than £2,000.
- What changes: the part of your sacrifice above £2,000 a year is treated as earnings for National Insurance, so you pay employee NI on it and your employer pays employer NI.
- Who is affected: HMRC estimates 7.7 million employees use salary sacrifice for pensions, and 3.3 million (44%) sacrifice more than £2,000. For those affected, the average extra employee NI is estimated at £84 in 2029/30.
- You don’t need to contact HMRC: employers make the payroll changes. GOV.UK says further guidance will be published before April 2029.
| Item | Rate or threshold |
|---|---|
| Employee NI, category A | 8% from £12,570 to £50,270 a year, 2% above |
| Employer NI | 15% above the £5,000 secondary threshold |
| Thresholds to 2030/31 | £12,570 and £50,270 kept until 2030/31 (Budget 2025) |
| 2029/30 rates | Not yet published: 2026/27 rates used |
GOV.UK: Changes to salary sacrifice for pensions from April 2029; HMRC: Salary sacrifice reform for pension contributions; GOV.UK: National Insurance rates; HMRC: Rates and thresholds for employers 2026 to 2027.
Before you rely on it
If the 28 October 2026 Budget changes this
The Autumn Budget is on Wednesday 28 October 2026. If it changes the £2,000 cap, its start date or the NI rates, an “Announced on 28 October” section is added to this page that day from GOV.UK’s Budget documents, and the page’s updated date changes. Until then the page uses the rules GOV.UK published before the Budget.
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Helpful answers
Salary sacrifice cap FAQs.
What is the £2,000 salary sacrifice cap?
From 6 April 2029, only the first £2,000 a year of employee pension contributions made through salary sacrifice will be exempt from National Insurance. Sacrifice above £2,000 is still allowed and still free of income tax, but you and your employer pay NI on the excess.
When does the salary sacrifice cap start?
6 April 2029, the start of the 2029/30 tax year. It was announced at Budget 2025.
How much extra NI will I pay on a £50,000 salary?
Sacrificing 8% (£4,000.00) puts £2,000.00 above the cap. At 2026/27 rates you would pay £160.00 more employee NI a year and your employer £300.00 more employer NI.
Does the cap affect income tax relief on my pension?
No. GOV.UK says contributions through salary sacrifice will still be exempt from income tax, subject to the usual limits. Only National Insurance changes.
Does a higher earner pay 8% or 2% NI on the excess?
It depends on your pay after sacrifice. Employee NI is 8% between £12,570 and £50,270 and 2% above. On £80,000 sacrificing 10%, the £6,000.00 excess is all above £50,270, so the employee pays £120.00 (2%) and the employer £900.00 (15%).
Sources, opened 22 October 2026: GOV.UK, Changes to salary sacrifice for pensions from April 2029; HMRC, Salary sacrifice reform for pension contributions (4 December 2025); GOV.UK, National Insurance rates and categories; HMRC, Rates and thresholds for employers 2026 to 2027; HMRC, thresholds maintained until 5 April 2031. Contains public sector information licensed under the Open Government Licence v3.0. An estimate, not tax or pensions advice.