Salary exchange is an alternative way for employees to make their pension contributions which saves both the employee and employer money. It is a long established and HMRC approved but hundreds of thousands of companies are missing out on this money saving method.
How does it work?
The employees agree to the employer paying their standard 5% pension contribution direct to the provider in exchange for a reduction in salary for the relevant 5%. This means that the 5% is no longer assessable for national insurance therefore the employers liability to HMRC is reduced and the employee’s take home pay increases.
How much can I save?
We can give you an accurate quote of the savings you can make we just need you to send us your latest payroll summary, pension file or wage slips and then we will do the rest. We just need figures, no names or details to enable us to give an accurate bespoke quote.
An employee on an average wage of £25,000 contributing the minimum 5% into a pension would save £142.56 every year by switching to this method. The employer would also save £163.92 per year! Of course the more staff you have the bigger the savings, as below.
10 employees - £1639.20 per year
20 employees - SAVE £3278.40 per year
30 employees - SAVE £4917.60 per year
Remember these are just illustrative figures you could be saving much more, let us give a no obligation quote.
Salary Sacrifice Calculator
Total savings summary
Annual NIC savings for you
Annual NIC savings for your employee
Estimated total annual savings*
*Contact us for your customised savings report