How to Maximise Your Take-Home Pay in 2024/25: 7 Legal Strategies

Most UK employees are paying more tax than they need to. Not through any fault of their own — the tax system is complex, and the most effective strategies aren't widely advertised.

Here are 7 legal, HMRC-approved ways to increase your take-home pay in 2024/25.

1. Maximise salary sacrifice pension contributions

This is the single most impactful strategy for most employees.

Salary sacrifice reduces your gross pay before tax and NI are calculated. Every £100 you sacrifice costs you:

• £72 if you're a basic rate taxpayer (20% tax + 8% NI)
• £58 if you're a higher rate taxpayer (40% tax + 2% NI)
• £38 if you're in the £100k–£125k Personal Allowance taper zone

The government and your employer are effectively subsidising your pension contributions.

Action: Ask your HR or payroll team to increase your salary sacrifice pension contribution. Even an extra 1–2% can make a significant difference over time.

2. Check your tax code

Millions of UK employees are on the wrong tax code and overpaying tax without knowing it.

Common reasons for an incorrect code:

• Benefits in kind (company car, private medical)
• Untaxed income from a previous year
• Starting a new job without a P45
• Marriage Allowance not applied

Action: Check your tax code at gov.uk/check-income-tax. If it's wrong, contact HMRC. You may be owed a refund going back up to 4 years.

3. Claim Marriage Allowance

If you're married or in a civil partnership and one of you earns less than £12,570 (the Personal Allowance), you can transfer up to £1,260 of unused allowance to the higher earner.

This saves the higher earner up to £252/year in income tax.

Eligibility:

• One partner earns less than £12,570
• The other partner is a basic rate taxpayer (earns between £12,571 and £50,270)
• You're married or in a civil partnership

Action: Apply at gov.uk/apply-marriage-allowance. You can backdate claims up to 4 years.

4. Eliminate the Child Benefit charge

If you or your partner earns between £60,000 and £80,000 and you claim Child Benefit, you're subject to the High Income Child Benefit Charge (HICBC).

For a family with 2 children, this charge can cost up to £2,212/year.

Salary sacrifice reduces your Adjusted Net Income — potentially eliminating the charge entirely.

Example: Earning £68,000 with 2 children. Sacrificing £8,000/year brings ANI to £60,000, saving the full HICBC of approximately £1,770 — on top of the usual tax and NI savings.

5. Restore your Personal Allowance

If you earn between £100,000 and £125,140, you lose £1 of Personal Allowance for every £2 earned above £100,000. This creates an effective marginal tax rate of 60%.

Salary sacrifice reduces your Adjusted Net Income. Sacrificing enough to bring ANI to £100,000 restores your full Personal Allowance.

Example: Earning £110,000. Sacrificing £10,000 brings ANI to £100,000, restoring £5,000 of Personal Allowance and saving approximately £2,000 in additional tax.

6. Use your employer's NI saving

When you sacrifice salary, your employer saves 13.8% NI on the sacrificed amount. Many employers have a policy of passing some or all of this saving back into your pension.

On a £5,000/year sacrifice, your employer saves £690. If they pass this back, your pension receives an extra £690 at no cost to you.

Action: Ask your HR team whether your employer has an NI sharing policy. If not, it's worth raising — it costs the employer nothing extra.

7. Cycle to Work and other salary sacrifice benefits

Salary sacrifice isn't just for pensions. Many employers offer:

• Cycle to Work scheme — save 32–42% on a bike and accessories
• Electric vehicle salary sacrifice — significant savings on EV leasing
• Childcare vouchers (legacy scheme, closed to new entrants but still running for existing members)
• Technology schemes — laptops, phones via salary sacrifice

Each of these reduces your gross pay, saving income tax and NI on the sacrificed amount.

Putting it all together

Here's an example of a higher rate taxpayer using multiple strategies:

These are all legal, HMRC-approved strategies. None require complex financial products or advisers.

Where to start

1. Use our calculator to see your current tax position
2. Check your tax code at gov.uk
3. Ask HR about salary sacrifice options
4. Check if you're eligible for Marriage Allowance
5. Review your Child Benefit position if you earn over £60,000