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How does salary exchange impact...
How does salary exchange impact my take-home pay?
How does salary exchange impact my take-home pay?

Always at least as good.

Rachele Carraro avatar
Written by Rachele Carraro
Updated over a week ago

The overall impact of moving to salary exchange is that you pay less tax on what you are already doing. As a result, you have two options:

  1. Increase your take-home pay

  2. Increase your pension contributions but keep the same take-home pay

The most tax-efficient way for you to use salary sacrifice is to put the money back into your pension and keep your take-home pay the same (by doing so you don't pay any tax on the new savings).

However, if you do want to increase your take-home pay, just note that whilst you will still save money vs what you had before, the savings will not be as much as you will pay income tax and national insurance on what you have just saved.

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