Salary sacrifice - employer view

liz_bartun

Also regarding maternity pay, there is something that affects the employer they should consider. The employer has to pay the full pension contribution (the pre maternity leave amount) throughout the maternity pay period. Statutory pay can't be sacrificed. Any occupational element of maternity pay can be sacrificed towards it. But the usual contribution the employer pays over to the pension provider continues mostly at the employer's expense.

Albermarle

Another issue is if an employee wants to apply for a mortgage, the lower, post-sacrifice salary is the one that is used

AIUI, many mortgage providers understand this issue and will use the pre SS pay for their calculations. Presumably some letter or similar is needed from the employer to confirm the pre SS salary.

QrizB

Albermarle said:

Another issue is if an employee wants to apply for a mortgage, the lower, post-sacrifice salary is the one that is used

AIUI, many mortgage providers understand this issue and will use the pre SS pay for their calculations. Presumably some letter or similar is needed from the employer to confirm the pre SS salary.

That's the case with the scheme I'm in. My employer will provide a salary statement with the pre-SS pay figures.

MallyGirl

liz_bartun said:

Another issue is if an employee wants to apply for a mortgage, the lower, post-sacrifice salary is the one that is used. Also the higher rate statutory maternity pay is based on post sacrifice pay.

I can change my Sal sac amount myself online, as often as I want, so I would just drop it down in time if that was the case

techno12

I'm loving the sal sac facility as the company I work for only pays the statutory minimum 3% to my pension but does give all their NI savings to it.

Hence I'm sacrificing as much as I can (58%) to max it out as just a few years away from 55 when I can potentially get at the cash hehe.

Company wide they switched everyone to SS earlier this year - I think most folk leave it at the default so a bit more in their pay packet each month.

Glad the govt didn't mess with it this week!

Murphy_The_Cat

As an ex-employer, running a sal sac scheme was a PITA at times - especially when employees "forget" about how much they are sacraficing when pay rise time rolls around.

OP, if you can manage without doing sal sac, then do so. In terms of (reliable) administration it can really eat into your time.

Jacklob

Can’t salary sacrifice reduce your state pension, I,m on salary sacrifice but I already qualify for the maximum state pension.

QrizB

Jacklob said:

Can’t salary sacrifice reduce your state pension.

Not usually; you can't sacrifice to less than national minimum wage, and that's enough for a full-time employee (and many part-time employees) to pay NI and earn SP entitlement.

Grumpy_chap

Mick70 said:

Does it create much more workload / admin from an employers viewpoint .

is there anything else to consider .

SS for pension (or other eligible schemes) probably creates some extra admin for the employer.

So would pretty much anything else to do with salary and reward packages.

Good employers still like to promote flexible reward packages that create a value for the employee greater than simply the monetary assessment.  This can be all sorts of things, but some examples are health insurance, holiday above statutory minimum, flexible work time / location, holiday buy-back, consumer discounts, gym membership.

SS for additional pension is no more than another of these types of provisions to be part of an attractive salary package and may assist in the recruitment and retention of staff.  I am quite sure that any employer offering SS considers that the costs and hassle of doing so are outweighed by the benefits to staff, being a more attractive employer and lower turn-over of staff.

Albermarle

I am quite sure that any employer offering SS considers that the costs and hassle of doing so are outweighed by the benefits to staff, being a more attractive employer and lower turn-over of staff.

Plus the employer can pocket their NI savings, unless they pass them on to the employee, which most seem not to do unsurprisingly.