Salary Sacrifice??

Paul_Herring

Kallisti wrote: »

If I sacrifice all my pay down to the higher rate threshold, can I then continue to get Child benefit about (£1752.40/year)?

http://www.bbc.co.uk/news/business-11552152 indicates (amongst other articles from this search) yes:

However, if an employee is already sacrificing into pensions, sacrificing a larger amount into pension would mean that the amount of cash remuneration the employee receives will be reduced, and while they may be able to keep the child benefit this will not necessarily help their cash flow as the benefit from the pension contributions will not arise until retirement.

This, of course, assumes that the current consensus applies, and they don't put in some rule saying that salary sacrifice won't affect the calculation.

ffacoffipawb

Paul_Herring wrote: »

http://www.bbc.co.uk/news/business-11552152 indicates (amongst other articles from this search) yes:


This, of course, assumes that the current consensus applies, and they don't put in some rule saying that salary sacrifice won't affect the calculation.

Salary sacrifice is giving up salary for an employer pension contribution, so that would open a whole can of worms with public sector employer contributions being 25% plus!

All employer contributions, via sacrifice or otherwise, would have to be taken into account (for fairness).

That would be treating it like a benefit in kind.

This stupid idea is a disincentive, especially if the removal isn't tapered - effective tax rate of 10,000% on income! Looks like a stupid Liebour type of policy really.

anderson105

If you enter a salary sacrifice arrangement this may affect your entitlement to
income-related benefits. If you are receiving Income Support or Jobseeker’s
Allowance you should contact your local social security or Jobseeker Plus
office to find out more. If you are not receiving either of these benefits, but are
receiving Housing Benefit and/or Council Tax Benefit you should contact your
Local Authorit

Paul_Herring

anderson105 wrote: »

If you enter a salary sacrifice arrangement this may affect your entitlement to
income-related benefits. If you are receiving Income Support or Jobseeker’s
Allowance you should contact your local social security or Jobseeker Plus
office to find out more. If you are not receiving either of these benefits, but are
receiving Housing Benefit and/or Council Tax Benefit you should contact your
Local Authorit

I would imagine the number of people on those sorts of benefits and taking part in salary sacrifice would be very small.

mustavit

Hi I've just joined moneyexpert and would like to add a post in salary sacrifice, can someone please advise how I can do this
Many thanks Steve

Si1

does anyone know what typical maximum salary sacrifice levels are, ie max % most employers will let you sacrifice?

Paul_Herring

Si1 wrote: »

does anyone know what typical maximum salary sacrifice levels are, ie max % most employers will let you sacrifice?

I think it's more likely to be limited to what you can contribute to your pension scheme which is set by the government and at the moment is the minimum of £50,000 or 100% of your salary.

So if you earn less than £50,000 you could, in theory, sacrifice the whole lot.

Certainly my employer placed no extra limits on what could be sacrificed for my scheme.

ffacoffipawb

Paul_Herring wrote: »

I think it's more likely to be limited to what you can contribute to your pension scheme which is set by the government and at the moment is the minimum of £50,000 or 100% of your salary.

So if you earn less than £50,000 you could, in theory, sacrifice the whole lot.

Certainly my employer placed no extra limits on what could be sacrificed for my scheme.

My employer won't let you sacrifice any amount that takes your income below minimum wage.

Paul_Herring

ffacoffipawb wrote: »

My employer won't let you sacrifice any amount that takes your income below minimum wage.

Do they give a reason?

And presuming you're salaried, and not hourly paid, how do they work out that level?

jamesd

Si1 wrote: »

does anyone know what typical maximum salary sacrifice levels are, ie max % most employers will let you sacrifice?

The effective legal maximum is enough to take you down to being paid at minimum wage level. That's because if you sacrificed to below minimum wage your employer would have to top your income up to minimum wage or be breaking the law. Other limits are the lower of £50,000 (but can carry over allowance unused in past years when you were in a pension scheme) or your whole earned income. The lowest limit is the one that applies.

No great reason for an employer to have any other limit than minimum wage, in part because it also saves them money if you pay in as much as possible.