Salary Sacrafice method..

SpeedSouth

Hi,

Recently joined my companies salary sacrifice scheme. I would have thought that doing it this way the amount reflected in my Gross pay would be worked out following the salary sacrifice %.

However on my payslips, I have 3 lines in the deduction column, tax, NI and salary sacrifice amount, with the Gross pay amount the top line figure.

How can I be sure that my tax is correct given the reason for the sacrifice is to amount HRT on a portion of it?

Thanks
Adam

martinsurrey

Companies generally leave the gross pay line untouched as its used for other calculations. For example in my company the gross pay pre salary sacrifice is used to calculate my employers pension contributions, bonus awards, share option awards, death in service benefits etc...

only way to check the calcs is to give us all the numbers.

jamesd

Visit the listentotaxman site and put the gross pay minus the salary sacrifice amount as your gross income. Do the income tax and NI match?

Paul_Herring

adam81 wrote: »

How can I be sure that my tax is correct given the reason for the sacrifice is to amount HRT on a portion of it?

https://listentotaxman.com/

In the Gross Wage box, put in your [Gross - sacrifice] and compare the NI and Tax coming out with your pay slip.

e.g. (rounded numbers) £54K/year gross with £12K/year sacrifice:

Gross: £4,500
Sacrifice: £1,000
(Thus you enter £3,500 as your gross into the website)
Tax: £516.67
NI: £339.40

If Tax & Ni were to be incorrectly calculated before the sacrifice the numbers would be (i.e. entering £4,500 as gross):
Tax: £900.00
NI: £367.77

zagfles

Paul_Herring wrote: »

https://listentotaxman.com/

In the Gross Wage box, put in your [Gross - sacrifice] and compare the NI and Tax coming out with your pay slip.

e.g. (rounded numbers) £54K/year gross with £12K/year sacrifice:

Gross: £4,500
Sacrifice: £1,000
(Thus you enter £3,500 as your gross into the website)
Tax: £516.67
NI: £339.40

If Tax & Ni were to be incorrectly calculated before the sacrifice the numbers would be (i.e. entering £4,500 as gross):
Tax: £900.00
NI: £367.77

That example won't be correct if you join sal sac mid tax year. The tax will be a bit less, as some 40% tax will be refunded from previous months.

Paul_Herring

zagfles wrote: »

The tax will be a bit less, as some 40% tax will be refunded from previous months.

Ok - it was a bit of a generalisation, but my point being that if you're getting the equivalent of the second set of numbers, then you know the tax is wrong and it's not being calculated correctly.

SpeedSouth

Cool..

Thank you.. works out correctly