Is there any benefit in Salary Sacrifice Redundancy pay into Pension

sgx2000

I know... An unusual question

Obviously redundancy pay is tax free
and pay in lieu of notice is taxed

So... is there any benefit of using salary sacrifice?

bluenose1

Not sure, but I think if they allow it I would put the pay in lieu of notice in as you would get the NI and tax back on that, wouldn’t have thought any benefit for redundancy pay if not taxable 

Pretty certain my employer did not  allow salary sacrifice for redundancies. 

Marcon

sgx2000 said:

I know... An unusual question

Obviously redundancy pay is tax free
and pay in lieu of notice is taxed

So... is there any benefit of using salary sacrifice?

Not necessarily - depends how much it is.

See https://www.lewissilkin.com/en/insights/taxation-of-payments-in-lieu-of-notice

Snot

As the first 30k is not subject to tax and NI there's nothing to save, it's not relevant earnings for tax relief. If you did put it in a pension you could potentially end up paying tax when you come to take the pension depending on your overall income position.

Dazed_and_C0nfused

Maybe a better plan would to use the tax free redundancy pay (assuming it is tax free) to fund a tax relievable contribution.

Either sacrificing taxable income or adding to a RAS scheme.  If you have earnings to allow this.

artyboy

I have twice salsac'd the excess over the £30k tax free redundancy payment. No brainer really, especially as it avoided HR/AR tax...