Pension comparison

Salary Sacrifice vs Net Pay vs Relief at Source

Compare the main workplace pension contribution methods and why calculator results change.

These arrangements can all put money into a pension, but they interact with payroll tax calculations differently. That is why the same contribution percentage can produce different take-home estimates.

Last updated 2026-05-16

How the three methods differ

Salary sacrifice reduces gross pay before tax and employee NI are calculated.

Net pay usually reduces taxable pay for income tax but not employee NI-able pay.

Relief at source is usually deducted after tax, with basic-rate relief added by the pension provider.

Why take-home pay can change

If a contribution lowers taxable pay, income tax can fall. If it lowers NI-able pay, employee NI can also fall.

Relief at source may show a smaller payroll deduction than the gross pension contribution because the provider claims basic-rate relief. Higher-rate or additional-rate relief can depend on separate claims and is not fully modelled here.

This is not advice

The best pension arrangement depends on employer scheme rules and personal circumstances.

This site explains calculation mechanics only. It does not recommend a pension scheme or financial decision.

Frequently asked questions

Which pension type gives the highest take-home pay?

It depends on the scheme, salary, tax position and employer setup. Salary sacrifice often reduces employee NI, while net pay and relief at source work differently.

Why does relief at source look different?

Relief at source is usually deducted from after-tax pay, then basic-rate relief is added by the pension provider rather than appearing as a payroll tax reduction.

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