GFTU Emplaw Emplaw Emplaw

Salary Sacrifice

Key Points

  • Under a pensions salary sacrifice arrangement an employee gives up part of their cash salary in return for pension benefits
  • Typically the employee's salary is reduced by the amount that they were previously paying as employee contributions to a pension scheme and the employer pays an equal amount to the pension scheme as an employer contribution
  • Salary sacrifice results in cost savings on National Insurance contributions
  • To introduce a salary sacrifice arrangement an employer needs to vary the terms of the employee's contract of employment
  • As salary sacrifice involves a reduction to the employee's salary, it could have some disadvantages (though most of these can be avoided if the arrangement is set up carefully)

The full content of this page is available to subscribers only. Please purchase a subscription if you feel this content will be of use to you.


Login or subscribe (includes subscription information) to access the full content of this page.