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Salary Sacrifice

Flexible Benefit - Salary Sacrifice, Bikes To WorkWhat is salary sacrifice?

A salary sacrifice benefit is where a non-cash employee benefit is offered by the employer in place of an equal amount of future salary. The employer and the employee will no longer pay tax or National Insurance on the salary sacrificed, and in most cases the benefit will also be free of tax and National Insurance.

What are the advantages of salary sacrifices?

Some of the most popular salary sacrifice benefits include:

  • Pension schemes
  • Childcare vouchers
  • Tax-free bicycles to work
  • Mobile phones

How can Ceridian help?

Ceridian will help you design and communicate your flexible benefits scheme. Our experts will make sure that it suits the culture of your organisation while giving you the variety and cost savings presented by salary sacrifice.

The key benefit of salary sacrifice as part of your flexible benefits offer is that the NICs relating to the sacrificed amount can be saved, allowing you to administer the benefit out of the savings.

An example of how salary sacrifice benefits can be advantageous to your business is shown in the following table, which details the savings you can make with a salary sacrifice pension:

Example of savings to be made with Salary Sacrifice
Number of employees in the scheme 100
Average salary of employees £30,000
Employee contributions 5% of salary
Savings in NI at 12.8% £19,200 per year
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