Redundancy Sacrifice Calculator

Redundancy sacrifice can provide a tax saving to the member for the employer to make a pension contribution on their behalf, should the employer pass on any of their National Insurance saving, this will increase the pension contribution at no extra cost.

• See the effect on the tax liability of the member, plus full calculations
  
  
• Assess the benefits of any employer saving passed on for the pension contribution.
  
  
• See the effective “return” based on an assumed rate of taxation when the pension is taken by the member

Key features of our Redundancy Sacrifice calculator

Model a redundancy sacrifice scenario

The main advantage of redundancy sacrifice, is a tax saving to the member to make a pension contribution, should the employer pass on any of their National Insurance saving this will increase the pension contribution at no extra cost. Enter details of salary, personal (relief at source), the gross redundancy amount, the amount of any taxable redundancy to be sacrificed and any employer National Insurance to be passed on to calculate the pension contribution that will be made.

You can also calculate the effective “return” based on an assumed rate of taxation when the pension is taken by the member. This is calculated based on the reduction to take home pay against what can be taken assuming no growth, 25% taken as a pension commencement lump sum with the remainder based on the assumed rate of pension income taxation.

Guidance, but not advice

The results of the tool are illustrative only and are in no way intended to be a recommendation for a particular course of action and do not constitute advice. The results are based on our current understanding of legislation and HMRC practice. But these might change without notice and the tool doesn’t take into account all of the possible circumstances that could impact your clients.

Learn more about sacrifice

Learn more about sacrifice and access a range of guidance from HMRC's Employment Income Manual And our article on salary sacrifice.

Use the Redundancy Sacrifice calculator