Salary sacrifice for pension

[David_D]

It (NI savings) is at the discretion of the employer.

In our case we pass the savings on to the employee - so their salary sacrifice is maximised & their pension is boosted.

It’s a simple, (no cost to the business) method to help employees.

Why not ?… it’s an employee benefit that’s a good way to retain good employees for zero additional cost to the business.

Emoloyers can do as they please but there are various upfront and ongoing legal/HMRC obligations to be observed in operating salary sacrifice so it’s not cost-free. The employee saves EE’s NI and the employer saves ER’s NI. What benefits the company ultimately helps the bottom line which should matter to the employees and their continuing employment!

[M1011]

Will it be going into their pension via Salary Sacrifice? Sort of implied but not explicit in the OP. If it's not via Salary Sacrifice, nobody gets any NI tax benefit.

It (NI savings) is at the discretion of the employer.

In our case we pass the savings on to the employee - so their salary sacrifice is maximised & their pension is boosted.

It’s a simple, (no cost to the business) method to help employees.

Why not ?… it’s an employee benefit that’s a good way to retain good employees for zero additional cost to the business.

z

You've got to really squint at it to make it a 'zero additional cost to the business' situation. If it's in the employees interest to put the money in their pension then that's what they'll do, handing them the companies NI saving is quite literally a cost that would otherwise not be incurred. The only way it could be a genuine 'zero additional cost to the business' situation would be if the employees decision to contribute that portion of their earnings to pension was dependant on whether they received the extra employers-NI uplift on it.

Not saying it's not a nice benefit to offer the employee and if an employer is willing to do it that's great, but then credit where it's due as it's not zero cost to them.

[zelig]

Will it be going into their pension via Salary Sacrifice?

… a genuine 'zero additional cost to the business' situation if the employees contribute that portion of their earnings to pension …
as they receive the extra employers-NI uplift on it.

Yes. That is precisely what we do.

Hence, my original comment re: zero cost.

z

[M1011]

Yes. That is precisely what we do.

Hence, my original comment re: zero cost.

z

First part of my comment was to the OP clarifying their scenario RE salary sacrifice.

In your scenario, regardless of Salary Sacrifice it is still not zero cost to the company to give up their NI benefit, it’s literally a cost, unless the niche scenario occurs where an employee only puts the money in their pension directly due to the availability of the additional NI refund.

[zelig]

...the niche scenario where an employee only puts the money in their pension directly due to the availability of the additional NI refund.

That's what we do.
We had the choice to pocket the NI reduction or pass it on to the employee.
We chose the latter.

z