Salary Sacrifice company sharing

Pat38493

Is there a formula I can use in a spreadsheet to model the company pension contribution to my pension if the company shares 50% of the NI saving with me on salary sacrifice.

I surmised that it is currently:

Half of 13.8% multiplied by the amount I am contributing (obviously plus the normal matching %).

This seems to give a result close but slightly lower than what the company has added?

This is so that I can model the total pension contribution based on an input % by me on various scenarios.

RogerPensionGuy

Example. 

Employer and employee both give £100 PM each.

£100 from employee. 
£106.90 from Employer. 

£6.90 is 50% or half of the company saving of 13.8% 

So total pension input will be £206.90 I think. 

I thought most companies give between 8 & 12% extra trying to look after employees, surly they only really need to keep 1% of the 13.8% savings.

Scot_39

Many companies don't in fact do any sharing - they are under no legal obligation to do so.

They can and some do use the NI rebate to fund their employer contributions.

techno12

My company pays in the full 13.8% into my pension. Good job too as they only pay in the statutory minimum of 3%, so I have to sacrifice a large amount of my salary (over 50%) to get this rate up...

Albermarle

I thought most companies give between 8 & 12% extra trying to look after employees, surly they only really need to keep 1% of the 13.8% savings.

I worked for a very large chemical company for a few years, and they kept every penny of the employer NI saving.

Without salary sacrifice these NI savings would have gone to the Treasury, but  are now helping to run a cycling team and fund multi Billion Pound bids for top Premier league clubs.

Pat38493

Albermarle said:

I thought most companies give between 8 & 12% extra trying to look after employees, surly they only really need to keep 1% of the 13.8% savings.

I worked for a very large chemical company for a few years, and they kept every penny of the employer NI saving.

Without salary sacrifice these NI savings would have gone to the Treasury, but  are now helping to run a cycling team and fund multi Billion Pound bids for top Premier league clubs.

Actually I also work for a large (German) Chemical company and they are actually sharing 50% of the NI savings with us, and also 7% matching.

At least that's what they say - I was just wondering how to validate it hence my OP, but I think it's mostly correct as I certainly found that my employer contributions went up upon increasing my personal contributions even though I was well beyond the matched %.

I was interested in the exact calculation so that in my spreadsheets I can model the impact on my total pension contribution of changing my personal % - I might have to reduce it a bit next year as we are expecting a bad year this year which means I probably won't get a bonus next year 2024.

westv

Our place does sal sac but only adds 9% + 3% if annual results are as expected. That's 9%+ even if you contribute nothing.

Scot_39

westv said:

Our place does sal sac but only adds 9% + 3% if annual results are as expected. That's 9%+ even if you contribute nothing.

But that 9% may be nothing to do with salary sacrifice rebate.

The German firm employee demonstrates the mix.

Old employer contribution, employee contribution, and part pay back of salary sacrifice savings.

A reasonable compromise.


And I suspect is a reflection of the way trade relations and employment works there.

Rather than the us vs them adversarial trade union employer relationship, Germany has a much less adversarial  - often even cooperative - and regulatory enforced workers consultation process.

And as such much better terms -  benefits and wages.