Chris Thorpe gives an overview of how salary sacrifice can still be used for employees.
As well as providing their employees with a salary, many employers wish to offer other benefits-in-kind (BIKs) as a means of further incentivisation or simply out of care for one’s workers.
That benevolence may be a little more affordable if an employee was able to make a contribution by having the cost deducted from their wages; by deducting the cost before tax and lowering the salary subject to income tax and National Insurance contributions (NICs), the employee will enjoy some savings too. If the salary is reduced below £100,000, income tax savings can be even greater with the personal allowance being restored; below £60,000, one’s child benefit might be restored too.
How did salary sacrifice work?
Before 6 April 2017, the employee would agree