Salary Sacrifice, Min Wage and BIK

I want to max out my pension contributions over the next few years using salary sacrifice. I am aware that you cannot sacrifice down to lower than the minimum wage which is about 20K a year  these days for a 37 hr per week position. However, can you sacrifice down to say 16K and then use the value of benefits in kind ( car and medical provided) to get you back up above the minimum wage level?


  • Pat38493
    Pat38493 Forumite Posts: 2,200
    Ninth Anniversary 1,000 Posts Name Dropper Combo Breaker
    I already asked this question a while ago.  The consensus answer was that no benefits in kind don't count so you have to keep the actual salary above minimum wage (although there was a one or two who seemed to think the opposite).

    I am doing this for a couple of months and I calculated it ignoring the car allowance.  I am on 80% contributions at the moment.  Actually last salary I got negative tax, presumably because if I continued to pay 80% rest of the tax year, I have already paid too much tax.
  • Linton
    Linton Forumite Posts: 16,837
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    Forumite says benefits in kind do not count toards minimum wage excerpt for work related accommodation.
  • dean350
    dean350 Forumite Posts: 38
    Part of the Furniture 10 Posts Combo Breaker
    Thanks all. Thats clear. Sal sac down to min wage and then pay tax on min wage+ the value of the BIK.
  • zagfles
    zagfles Forumite Posts: 19,938
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    edited 23 November at 8:57AM
    You could always pay the value of the BIK as a normal employee contribution (ie NOT sal sac), or into a SIPP etc. You don't pay employee NI on BIKs anyway, so you don't lose out on NI savings
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