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Taxopedia  ›  S  ›  Salary sacrifice
S · Glossary

Salary sacrifice

Reduce gross salary in exchange for non-cash benefit (typically pension) — saves tax + NI.

Salary sacrifice reduces your gross salary in exchange for a non-cash benefit. Most common: pension contributions. Saves both income tax AND NI on the sacrificed amount — making it more tax-efficient than personal pension contributions for higher earners.

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