Contact Us

Your employer may offer you salary sacrifice as a way to minimise the impact of your pension contributions on your take-home pay.

Essentially, you give up part of your salary which is then paid by your employer into your pension pot, and you receive a lower salary.

For example, you earn £20,000 a year and decide you want to give up £1,000 of your salary. Your new salary is £19,000. Your employer then pays £1,000 to your pension pot.

Because you receive a lower salary, both you and your employer pay less national insurance contributions (NICs). Your employer may pay all or part of their NIC saving to your pension pot as well, but they don't have to do this.

Salary sacrifice is not always an effective way of saving for some people. If your employer offers a salary sacrifice arrangement, you should make sure you are fully aware of the implications before signing up for it. In particular, pay close attention to what would income be reported to lenders and the impact on state benefit entitlements. You do not have to take part in it, even if your workplace scheme uses it.

If you would like to discuss the tax implications of salary sacrifice in more detail, you should ask your employer for more information or ask them to calculate an estimate of the effect of the salary sacrifice on your take home pay.

Date published 30 May 2014

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

Choose the right accounting firm for you

Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?

Local business focus icon

Local business focus

We specialise in supporting independent businesses and work with 80,684 clients. Each TaxAssist Accountant runs their own business, and are passionate about supporting you.

Come and meet us icon

Come and meet us

We enjoy talking to business owners and self-employed professionals who are looking to get the most out of their accountant. You can visit us at any of our 409 locations, meet with us online through video call software, or talk to us by telephone.

Switching is simple icon

Switching is simple

Changing accountants is easier than you might think. There are no tax implications and you can switch at any time in the year and our team will guide you through the process for a smooth transition.

See how TaxAssist Accountants can help you with a free, no obligation consultation

0800 0523 555

Or contact us