Sal Sac - employer NI contributions query

Leigh-Anne_60

Hi

Hoping somebody out there can assist.  Our company up until now have put 100% of Employer NI savings in the pot…. However they have just announced that they will reduce this to 50% from next month

Whilst I know 100% was quite generous, can’t help feeling a little aggrieved that my company are now looking to profiteer from my future planning

Anyway, what I’m unsure of is what this will actually cost me.  Looking at last month, my Sal Sac amount on my payslip was £1,258, the amount into my ‘pot’ was £1,606…….. is it as simple as 50% of the difference, ie £174? 

Thank in advance x

Mark_d

Not as simple as this, because both you and your employer make NI savings thorough the salary sacrifice route.  I get 0% of my employer's NI savings but I still pay 40% of my salary in to pension.

HappyHarry

Leigh-Anne_60 said:

Hi

Hoping somebody out there can assist.  Our company up until now have put 100% of Employer NI savings in the pot…. However they have just announced that they will reduce this to 50% from next month

Whilst I know 100% was quite generous, can’t help feeling a little aggrieved that my company are now looking to profiteer from my future planning

Anyway, what I’m unsure of is what this will actually cost me.  Looking at last month, my Sal Sac amount on my payslip was £1,258, the amount into my ‘pot’ was £1,606…….. is it as simple as 50% of the difference, ie £174? 

Thank in advance x

You are salary sacrificing £1258, your company is putting in some/all of their NI saving, and your company is also contributing an undetermined amount.

The difference won’t be £174, it will be less than this.

Could you confirm your company’s contribution (not including their NI saving)?

Leigh-Anne_60

Happy harry!  Of course!  Their 5.5% cont’s would be £160.  Leaving employers NI contribution at around £188 I assume? 

Marcon

Leigh-Anne_60 said:

Hi

Hoping somebody out there can assist.  Our company up until now have put 100% of Employer NI savings in the pot…. However they have just announced that they will reduce this to 50% from next month

Whilst I know 100% was quite generous, can’t help feeling a little aggrieved that my company are now looking to profiteer from my future planning

Look at it another way. Your company is now having to pay higher employer's NI and is taking steps to control their costs and ensure the security of your job...how is that 'profiteering from your future planning'?

molerat

Leigh-Anne_60 said:

Happy harry!  Of course!  Their 5.5% cont’s would be £160.  Leaving employers NI contribution at around £188 I assume? 

The employer NI saved of 15% on your £1258 sacrifice is £188.70

JoeCrystal

Leigh-Anne_60 said:

Whilst I know 100% was quite generous, can’t help feeling a little aggrieved that my company are now looking to profiteer from my future planning

Thank in advance x

Well, many people do not even have the luxury of a salary sacrifice or even a higher-than-average employer's contribution at 5.5%.  You should still be pleased to have some employer's NI savings.  

HappyHarry

Leigh-Anne_60 said:

Happy harry!  Of course!  Their 5.5% cont’s would be £160.  Leaving employers NI contribution at around £188 I assume? 

Sounds about right. So you will lose approx. £94.

Lots of employers are cutting back their NI contributions to pensions since the changes came in in April. It isn't just the rise from 13.8% to 15% they are facing it is also the fact that employer's NI is now due on earnings above £5,000 instead of the previous £9,100.

QrizB

My employer offers salsac but keeps the NI savings to themselves.

Leigh-Anne_60 said:

Our company up until now have put 100% of Employer NI savings in the pot…. However they have just announced that they will reduce this to 50% from next month

Is your workplace unionised? What does the union think?

Leigh-Anne_60

No Oriz, we don’t have a Union 

Grumpy_chap

Leigh-Anne_60 said:

Hoping somebody out there can assist.  Our company up until now have put 100% of Employer NI savings in the pot…. However they have just announced that they will reduce this to 50% from next month

Whilst I know 100% was quite generous, can’t help feeling a little aggrieved that my company are now looking to profiteer from my future planning

It is far from universal for employers offering SS pension (not all do) to pass on any of the employer's NI saving to the employee.
All employers are incurring the additional NI costs of the lower threshold and the increased contribution rate.

Many employers are looking at ways to keep the overall cost to employ the same even considering the additional employer NI to be incurred. 
If the employer is managing this by passing on less of the NI saving from SS pensions to employee pensions, that might be the least bad option.

What alternative option for managing the overall cost to employee would the OP consider preferable?

I certainly can't see that this is the company profiteering from the OP's future planning.