Salary sacrifice?

planteria

good points MG. the company are offering 3 x Salary as a LA payment, so that's a factor to consider.. if they offer SalSac: i won't be surprised if they don't.

MallyGirl

My company retains the concept of a base salary and life assurance/ bonus etc are based on that regardless of what Sal sac options I choose- not all employers are the same.

Albermarle

i was wondering about asking payroll to increase my contribution, but perhaps i ought to look at salary sacrifice instead.. are there implications re the state pension by opting for salary sacrifice?

This will depend on whether your company is set up to do salary sacrifice . You may find they do not offer it as an option. Although they should do as it is beneficial to the employee and either beneficial or neutral for the employer ( depending on if the keep their NI savings or pass them on to you.
To be honest I am not clear on why HMRC allows it as they are losing out on NI contributions. Maybe it will be stopped one day ?
.As far as I know it has no effect on state pension.

chrisfreelander54

I'm going ask my employer if they can run my wages through their wage system to see what the difference would be if I change to salary sacrifice.

At present my annual wage pre tax is £25,500 plus £1000 per annum towards my fuel costs

Is there an online calc to work out what I'm paying compared to what I would pay if was going to change salary sacrifice, as this has got me thinking?

xylophone

https://www.legalandgeneral.com/workplacebenefits/employees/plan-for-your-future/salary-sacrifice/

https://goodcalculators.com/salary-sacrifice-calculator/

Paul_Herring

are there implications re the state pension by opting for salary sacrifice?

Only if
- You don't have the full 35 years yet and
- it would reduce your salary below the Lower Earnings Limit (LEL) (£503/month, £116/week for 2018/19)

This latter is difficult to do for those working full time and/or paid above minimum wages.

Since you cannot sacrifice below the National Minimum Wage for Living (or whatever they're calling it this year...) the LEL equates to working (£116/£7.83) ~15 hours per week at the NMW.

So if you're working and/or paid more than that, you cannot sacrifice below the LEL, so it won't affect your contributions for state pension.

Paul_Herring

chrisfreelander54 wrote: »

Is there an online calc to work out what I'm paying compared to what I would pay if was going to change salary sacrifice, as this has got me thinking?

https://listentotaxman.com/

If you're net-pay/relief at source, use the Pension Contribution box to enter the net amount (before relief)

For salary sacrifice, reduce your gross pay by the contributed amount and leave the Contribution box empty.