Salary sacrifice - Employer NIC savings paid into pension

GazzaBloom

My employer pays in the employer's NIC they save on the amount of salary employees sacrifice into their pensions. They always have done this at the 13.8% rate as that is what the rate has been since they introduced salary sacrifice into the company. All good and very much appreciated but…

It appears I am the only employee to have noticed that they have not increased this to 15.05% (the new employers NIC rate for 2022/3) from the April pension payment and contributions are still at the 13.8% rate.

I politely enquired with payroll and asked if this was a conscious decision or an oversight and got a terse reply saying that the employers NIC saving part of the salary sacrifice pension payments is fixed at 13.8%. I suspect they have missed it and I have escalated up to my line manager and asked for some clarity.

Now, I know they don't have to pay anything and the amount is relatively small, for me, it's about £346 for this tax year as I am sacrificing a quite high percentage of salary. I feel I am being short changed and the company are trousering the saving and being tight fisted. £346 compounded over 10-20 years could be a fair amount of money.

anyone else's employer paying the extra 1.25% they save into the salary sacrifice pension this year?

Dazed_and_C0nfused

Personally I think you've done pretty well to have been getting the full 13.8%.

Better 13.8% than nothing.

GazzaBloom

Dazed_and_C0nfused said:

Personally I think you've done pretty well to have been getting the full 13.8%.

Better 13.8% than nothing.

Yeas I agree, but all of the S/S documentation I can find fro our company states they will pay in the NIC they save, no mention of it being fixed.

I did ask payroll that if the amount is fixed at 13.8% does that mean that if the employers rate dropped below that in the future, to say 12% then it would it be logical to assume that they would continue to pay 13.8%? 

I didn't get a reply. 

I think it's an oversight and I have simply asked for clarity as to whether it's a conscious decision or an error.

westv

Does this mean then that any employer using sal sac that is paying in less than their NI saving isn't actually spending any money on pension contributions - aside from admin costs?

eastcorkram

Dazed_and_C0nfused said:

Personally I think you've done pretty well to have been getting the full 13.8%.

Better 13.8% than nothing.

Agreed. 
I'd love to get any percentage of it. I'm using SS for about £220 per week, and I did ask about the employers NI, but was simply told 'we don't do that'. 

Albermarle

 I feel I am being short changed and the company are trousering the saving and being tight fisted

Most employers trouser all of it, so that would make your employer the opposite of tight fisted.

GazzaBloom

westv said:

Does this mean then that any employer using sal sac that is paying in less than their NI saving isn't actually spending any money on pension contributions - aside from admin costs?

No. My employer is paying and agreed company contribution as a percentage of salary, over and above my own personal percentage contribution percentage of salary but they also pay an extra amount based on the employer's NIC they save on my personal contribution that I salary sacrifice as they would pay this to government if I didn't salary sacrifice, so it's a "saving" to them which they pass on.

GazzaBloom

Albermarle said:

 I feel I am being short changed and the company are trousering the saving and being tight fisted

Most employers trouser all of it, so that would make your employer the opposite of tight fisted.

Really? That's quite mean, the more you salary sacrifice the more they save and trouser.

Albermarle

GazzaBloom said:

Albermarle said:

 I feel I am being short changed and the company are trousering the saving and being tight fisted

Most employers trouser all of it, so that would make your employer the opposite of tight fisted.

Really? That's quite mean, the more you salary sacrifice the more they save and trouser.

Which I presume is why salsac is popular with many employers, as well as employees.

MallyGirl

GazzaBloom said:

Albermarle said:

 I feel I am being short changed and the company are trousering the saving and being tight fisted

Most employers trouser all of it, so that would make your employer the opposite of tight fisted.

Really? That's quite mean, the more you salary sacrifice the more they save and trouser.

It is 50:50 in the Mally household. My employer does not pass on their NI saving whereas my OH's employer does. 

GazzaBloom

MallyGirl said:

GazzaBloom said:

Albermarle said:

 I feel I am being short changed and the company are trousering the saving and being tight fisted

Most employers trouser all of it, so that would make your employer the opposite of tight fisted.

Really? That's quite mean, the more you salary sacrifice the more they save and trouser.

It is 50:50 in the Mally household. My employer does not pass on their NI saving whereas my OH's employer does. 

@MallyGirl are they passing on the extra 1.25% this year?