Introduce, manage and review a salary-sacrifice scheme
- 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.
- Employers that operate a salary-sacrifice scheme should carry out a regular review to make sure that it is meeting its aims and objectives. It is important that they check that their scheme remains valid and compliant as far as tax rules are concerned.
- Employers can use information on take-up and employee feedback to help review and revise the benefits on offer via the scheme.