What is Salary Sacrifice? A salary sacrifice arrangement is an agreement to reduce an employee’s entitlement to cash pay, usually in return for a non-cash benefit. As an employer, you can set up a salary sacrifice arrangement by changing the terms of your employee’s employment contract. Your employee needs to agree to this change. A salary sacrifice arrangement must not reduce an employee’s cash earnings below the National Minimum Wage (NMW) rate. Employers must put procedures in place to cap salary sacrifice deductions and ensure NMW rates are maintained.
Why do we do it? Salary Sacrifice can reduce your National Insurance Contributions (NICs) and Income Tax as the employee is not directly being paid. This will depend on the pay and non-cash benefits that make up the salary sacrifice arrangement. Salary Sacrifice can be a retention tool that incentivises employees to invest in their financial future and well-being. Which can reduce costs to the employer and increase employee health and work satisfaction.
What do we need from the client? We need to understand what you and your employees consider to be important and tailor Salary Sacrifice schemes to those priorities. We also need to understand your budget to facilitate the benefits.
What will we produce? The salary sacrifice recommendations will be incorporated into your Employee Benefits plan.