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Pixie Share Incentive Plan (SIP) Calculator

Calculate the tax savings from contributing to your employer's UK Share Incentive Plan (SIP). Models partnership shares, free shares, matching shares, and dividend shares against the 5-year HMRC holding period for full tax efficiency.

Β£
Β£
0 = no match, 1 = matching, 2 = HMRC maximum
How this works
  • Your marginal tax rate: 20% income tax + 8% NI = 28% effective discount at purchase.
  • Partnership shares come from gross salary β€” saving Β£504 you'd otherwise pay to HMRC.
  • Hold for 5+ years: zero income tax + zero NI on withdrawal (CGT may still apply on gains).

Estimates use UK 2025/26 rUK tax bands. Not advice β€” confirm with an accountant before acting, especially around CGT planning and Scottish tax rates.

How the SIP Calculator works

Three simple steps. No signup. No installation.

1

Enter your salary and contribution

Annual gross salary and how much you want to put into partnership shares per month (up to Β£150 or 10% of salary, whichever is lower).

2

Add employer match

If your employer offers matching shares (up to 2 free shares per partnership share), include the ratio.

3

See your 5-year tax benefit

Compare net cost vs. share value after the 5-year HMRC holding period β€” including saved income tax and National Insurance.

Why SIPs are the UK's most tax-efficient share scheme

Share Incentive Plans are HMRC-approved employee share schemes introduced in 2000 to encourage employee ownership. They are the most tax-efficient way for UK employees to acquire their employer's shares because the partnership share contribution comes out of gross salary β€” saving income tax (20%, 40%, or 45%) and Employee National Insurance (8% or 2%) at the point of purchase. Combined with potential employer matching and a 5-year tax-free holding period, the effective return can exceed any ISA or pension contribution for company shares. The catch is concentration risk: holding a meaningful percentage of your net worth in a single company exposes you to both job loss and stock crash in correlated ways. The classic example is Enron employees who held company stock in their 401(k)s β€” when the company collapsed, they lost jobs and savings simultaneously. SIPs in the UK have slightly better protections because they are not retirement accounts, but the diversification lesson stands: take the tax benefit, then sell and diversify once the 5-year hold matures.

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