Salary Sacrifice??

stphnstevey

Debt_Free_Chick wrote: »

It's the standard tax break - employer's contributions to a registered pension scheme are not classed as a BIK, so no tax impact for the employee.

Not just pension contributions - I see salary sacrifice can be used for other benefits (PMI and possibly Company Car) - what about them?

aleksrothis

I have a query about salary sacrifice pensions which I don't see answered earlier in the thread...

My employer are talking about switching our pension scheme to a salary sacrifice scheme but, if it is effectively lowering my gross salary, what effect will this have on my student loan repayments? Currently I'm only paying about £10/month unless I get bonuses or overtime so it would drop me back under the threshold...

Thanks

jamesd

The student loan obligation will be calculated on the salary after sacrifice. So in your case that may eliminate the payments.

Debt_Free_Chick

stphnstevey wrote: »

Not just pension contributions - I see salary sacrifice can be used for other benefits (PMI and possibly Company Car) - what about them?

But the employee would be taxed on PMI and Co Car, as they are both benefits in kind.

stphnstevey

Got wrong end of stick then - salary sacrifice for pensions seems to take advantage of the fact that company contributions to a pension scheme are not seen as BIK.

Thought this might extend to Compan Cars and PMI, but guess there is still a BIK

Any ideas why there woul be such as salary sacrifice scheme for company cars then?

jamesd

There are still potential NI savings to be made, on both employee and employer NI, for PMI. Employer and employee NI is where the main gain comes in pension contributions from salary sacrifice.

Benefit in kind tax (P11D income tax filing, or collected in payroll, depending on the scheme):

yes: childcare vouchers above a limit, critical illness insurance, retail vouchers, private medical insurance, dental insurance, partner's life assurance

no: bike, ill health income protection (PHI), life assurance, pension, childcare vouchers up to £55 per week

Employee NI to pay:

yes: childcare vouchers above limit, retail vouchers

no: bike, critical illness insurance, private medical insurance, dental insurance, ill health income protection, life assurance, partner's life assurance, pension, childcare vouchers up to £55 per week

DUS

Hello,

I am employed by a very small Austrian company and currently the company´s only employee working from/in the UK. As such, the company has no pension scheme running.

After 1 year in the country and me planning to stay much longer, I started thinking about pension contribution, including SIPP, salary sacrifice etc. My question re salary sacrifice is, how the amount needs to be invested. Does the company have to sign up to whatever pension scheme or pension provider or can I decide where to put the money? Could I even invest the money into a SIPP? How would that work? With the company being based in Austria, I would think that they will show litte (e.g. no) enthusiasm for a salary sacrifice program that would require them to do lots of paperwork or sign up to a pension provider. Well, I am certainly going to ask them, but the less "hassle" this process will cause, the more likely my company will support me with my pension plan.

Would be great if you could help me in better understanding how the money has to be invested and what my company would have to do to make this all work.

Thank you very much in advance for your support!

DUS

stphnstevey

jamesd wrote: »

There are still potential NI savings to be made, on both employee and employer NI, for PMI. Employer and employee NI is where the main gain comes in pension contributions from salary sacrifice.

Benefit in kind tax (P11D income tax filing, or collected in payroll, depending on the scheme):

yes: childcare vouchers above a limit, critical illness insurance, retail vouchers, private medical insurance, dental insurance, partner's life assurance

no: bike, ill health income protection (PHI), life assurance, pension, childcare vouchers up to £55 per week

Employee NI to pay:

yes: childcare vouchers above limit, retail vouchers

no: bike, critical illness insurance, private medical insurance, dental insurance, ill health income protection, life assurance, partner's life assurance, pension, childcare vouchers up to £55 per week

Sorry James, can you spell it out for me, I was out last night and lacking sleep - brain dead
:beer:
Via salary sacrifice:
PMI - BIK but no NI
Company Car - BIK and......any other benefits?

DUS

DUS wrote: »

Hello,

Thank you very much in advance for your support!

Really no-one? :think:

DUS

Hi,

Not sure if anyone is actually reading this thread but I hope there is and would like to ask one additional question:

If I agree with my employer on a ss of, let´s say, GBP 500/month, could I change (reduce/increase) that amount at any given time? What´s the formal regulation for this change in the monthly salary sacrifice? Does anyone know and care to let me know?

Thank you!!!

DUS