Introduce a salary-sacrifice scheme

Key points

  • Under a salary-sacrifice scheme, employees agree to forego part of their salary in return for non-cash benefits such as childcare vouchers and pension contributions, which can enable tax and national insurance savings to be made.
  • Typical employer objectives for starting a salary-sacrifice scheme include indirect employment cost savings, being able to offer a wider range of benefits to employees, and greater employee empowerment and flexibility of choice as to how the individual remuneration package is shaped.
  • The employer will need to decide if it will set up and run the salary-sacrifice scheme in-house or use a third-party provider.

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