Salary Sacrifice On The Up
According to a survey by Employee Benefits and Staffcare, 84% of employer respondents allow staff to contribute to their DC pension through a salary sacrifice arrangement. This represents an increase of 10% since 2016.
Salary sacrifice is a great way of reducing National Insurance Contributions for Employers and employees. However, it is vital that salary sacrifice arrangements be implemented properly. It is not possible to retrospectively implement or amend an attempt to use salary sacrifice. Defective salary sacrifice schemes may be void, resulting in historic employer and employee NICs falling due for payment alongside potential financial penalties.
Have you checked that your salary sacrifice arrangements have been implemented correctly? The main requirement is that there has been an effective amendment to the employment contract. There are various ways this can be achieved – please feel free to contact us if you would like a review of your existing salary sacrifice arrangements or if you are setting up a new salary sacrifice scheme.