Salary sacrifice limit

CaptainWales

I currently do salary sacrifice and have asked my employer what is the maximum percentage I can sacrifice. My employer has said that there is no limit but my salary can not fall below minimum wage. 

I work 35 hours a week. So does that mean I have to earn a minimum of £22,222.20? (£12.21 per hour x 35 hours per week x 52 weeks per year). What happens if I don't earn that much?

Isthisforreal99

You need to be paid the minimum wage for every pay period, whether that be weekly, monthly.

Normally an employers systems wouldn't let this happen but if it did they would be liable for a fine and named on the HMRC naughty list.

CaptainWales

But how would HMRC find out? I would not report them as I had chosen the amount of salary to be sacrificed

Isthisforreal99

CaptainWales said:

But how would HMRC find out? I would not report them as I had chosen the amount of salary to be sacrificed

So, you want your employer to break the law for you?

CaptainWales

Isthisforreal99 said:

CaptainWales said:

But how would HMRC find out? I would not report them as I had chosen the amount of salary to be sacrificed

So, you want your employer to break the law for you?

Not at all (and I imagine their systems would prevent it from happening). I am thinking practically how this would ever come to light?

HappyHarry

All employee income is reported to HMRC by your employer.

Whilst your employer has to make sure they pay you at least minimum wage, you can make additional personal pension contributions to another pension, or even possibly to the same pension your employer uses.

Isthisforreal99

CaptainWales said:

Isthisforreal99 said:

CaptainWales said:

But how would HMRC find out? I would not report them as I had chosen the amount of salary to be sacrificed

So, you want your employer to break the law for you?

Not at all (and I imagine their systems would prevent it from happening). I am thinking practically how this would ever come to light?

That's exactly what you want them to do otherwise why ask the question as to how HMRC would find out.

Well the obvious way is that your employer is now obliged to report your working hours to HMRC so unless you want them to lie about that as well.

Newbie_John

Salary sacrifice is an agreement between you and employer that they will pay you less - your actual salary goes down - but you receive some additional perks.
So let's say you earn £1 / year being full time employee, easy to spot, as you'll pay no taxes.

flaneurs_lobster

Newbie_John said:

So let's say you earn £1 / year being full time employee, easy to spot, as you'll pay no taxes.

Well since employers have to report gross pay and deductions for pension, tax etc (as well as usual hours worked) it should be even easier to spot.

Cobbler_tone

If you have a decent employer ask them what your max contribution is. Mine emailed me back within the hour with a spreadsheet showing holiday purchase, share purchase, private healthcare and a remaining limit of 54.6% for pension contributions. They should be all over it to stay on the right side of the law.

CaptainWales

Cobbler_tone said:

If you have a decent employer ask them what your max contribution is. Mine emailed me back within the hour with a spreadsheet showing holiday purchase, share purchase, private healthcare and a remaining limit of 54.6% for pension contributions. They should be all over it to stay on the right side of the law.

I asked them but all they said is that i can sacrifice any amount so long as it doesnt take me below NWD.