Those with employers who agree to salary sacrifice

Albermarle

Remember that the employers can offer SS without offering to pay in any of the savings they make on N

Yes some large employers with a multi Billionaire Boss, keep it for themselves , like mine does.

Personally I think this tax loophole will get closed one day soon, as it is just a blatant avoidance of paying NI by employee and employer.

ffacoffipawb

Albermarle wrote: »

Yes some large employers with a multi Billionaire Boss, keep it for themselves , like mine does.

Personally I think this tax loophole will get closed one day soon, as it is just a blatant avoidance of paying NI by employee and employer.

Then employer contributions would need to be NI'd as well. How would that work for defined benefit schemes. Would open a whole new can of worms. This is why I cannot see anything happening here.

ratechaser

Interesting thread, as I'd never really given any thought to what happens to those NI cons that aren't getting paid due to a Sal Sac arrangement. TBH my employer would only be making 2% off of me here anyway but clearly it's a lot more relevant at different income levels.

For me it's more a convenience thing anyway, less to have to work out for my tax return (tapering and carryover calculations aside). And as they pay in over 16% to my 7%, and pay all the pension management charges, I wouldn't complain if they pocketed the lot...

JustAnotherSaver

Regards myself, i'm above minimum wage but not a vast amount. Best part of £1 over but not as much as £1. I get an overtime rate which isn't quite 1.5x. Last year i earned £25k. So salary sacrifice probably wouldn't put me under minimum wage.




I do think i've got the wrong end of some stick though here. This talk of 12% savings has thrown me.


I thought salary sacrifice was where the company can save money on what they pay on your NI, they can then choose to keep these savings for themselves or give the savings to you or split them between the pair of you. Clearly i've got that wrong.


So is salary sacrifice then you saving on your contributions AND them saving on their NI payments also? Your savings would go direct in to your pension and their savings could either go all to themselves or be split with you (or given to you)?
If that's the case then ... do you end up paying any NI at all??






Final question ... i've seen numerous links out there. Some confuse the hell out of me and aren't very clear. If you were going to try and persuade your employer to take advantage of salary sacrifice then what link would you provide them with?
Key would be it'd have to be short & sweet. Any 100 page essay wouldn't get read.


And a calculator giving the facts to them in numbers could be better than any article (possibly).

bluenose1 wrote: »

I thought it was to employers financial advantage to do it so not sure why yours wont.

When i originally asked i was given 1 reason - they would have to still provide this even if staff were signed off sick. They said there were other reasons but never actually spelled those out. I guess perhaps the admin cost of setting it up maybe (if it's something really technical or something like me they don't fully understand - so would take time).

AnotherJoe

JustAnotherSaver wrote: »

So is salary sacrifice then you saving on your contributions AND them saving on their NI payments also? Your savings would go direct in to your pension and their savings could either go all to themselves or be split with you (or given to you)?

Bang on. You pay less NI, and so do they. You obviously get the benefit of paying less NI, so do they, they can choose what to do with their saved NI. Typically they would put some into your pension as well. But as above, not all do.

JustAnotherSaver wrote: »

If that's the case then ... do you end up paying any NI at all??

yes because as a limit you need to earn minimum wage.

cloud_dog

JustAnotherSaver wrote: »

Final question ... i've seen numerous links out there. Some confuse the hell out of me and aren't very clear. If you were going to try and persuade your employer to take advantage of salary sacrifice then what link would you provide them with?
Key would be it'd have to be short & sweet. Any 100 page essay wouldn't get read.


And a calculator giving the facts to them in numbers could be better than any article (possibly).

Try this one...

EDIT: Fixed it

JustAnotherSaver

cloud_dog wrote: »

Try this one...

"https://www.moneyadviceservice.org.uk/en/articles/salary-sacrifice-schemes/amp"

"Whoops!

Sorry, you've landed on a page that doesn't exist"




Don't think that one would help me out much :rotfl:

BoxerfanUK

For my OH, her employer puts 10% of their employer NI saving into her pension and they keep 3.8%

MallyGirl

Mine gives me nothing of the employer NI saving but does contribute 10% to pension if I give 5% (I actually do 50%). My OH's employer gives him the whole saving.

Novice_investor101

I consider that people who work for my employer & don't pay in the maximum amount of 8% that is matched with 14% are actually helping pay into my pension...

My employer pays in an extra 0.2% in addition to the whole 13.8% NI saving they make.
They only match up to 6% if you pay in the lowest amount of 2%, 7% if you pay in 4% and 9% if you pay in 6% - pocketing the difference (or adding it into the pensions of the people who pay in the maximum 8%).
It's a no brainer to pay in the max & I'm still stunned when I hear people tell me they're on the default 2% still. It's like passing up a payrise!