Salary exchange

kazflan Registered Posts: 36 πŸ’« 🐯 πŸ’«
I am currently dealing with pensions and have been asked if it is possible to allow an employee to have pension deductions taken as normal from salary, but to also allow the employee to salary exchange an additional set amount each month at the same time?? I have been advised that the best option is to allow one or the other as it can get complicated and can be open to errors. I have not had to do both before and I think that although I believe it would be quite straight forward ,there may be issues I am not aware of. has, or does anyone run both options on payroll?? Any advice would be much appreciated before I commit myself.


  • Jmann
    Jmann Registered Posts: 68 πŸ’« 🐯 πŸ’«
    Why not do whole pension contribution as salary sacrifice? Employees saves on NI and employer saves NI too.

    What happens to NI saving made by the employer? Is the employer going to keep? Or is the employer going to pay into the pension?

    I think you would have problem convincing HMRC re part of the pension is salary sacrifice and part is not. Also recently they changed some rules but I have not had a chance to read them yet.
  • kazflan
    kazflan Registered Posts: 36 πŸ’« 🐯 πŸ’«
    The intention is to do the whole amount as a salary sacrifice, but some want to have the option to do both!!!! I do not understand why? As I have been asked the question I have to look into it.
    With regard to employers NI, that will be passed on to the employee. I think the caution with some is the impact on other benefits and also the fact that the annual salary for ie loans , mortgages will be based on the lower earnings.
    Thank you for responding as I have tried to speak to the Inland rev but not getting very far. As I say any advice would be a great help or even point me in the right direction where to look.
  • Jmann
    Jmann Registered Posts: 68 πŸ’« 🐯 πŸ’«
    kazflan wrote: Β»
    The intention is to do the whole amount as a salary sacrifice,

    Then go for it. But if you do some salary sacrifice and some not, you would have lot of problem creating a pension file for the pension company.

    When submitting / paying pension contribution to the pension provider, you would have to identify two separate contribution, employers' and employees'. If you make mistake, then likely some one will get the double tax relief and some one no relief at all!

    I know this from experience and we have about 90 members in the scheme and we do prepare and upload the pension file onto pension providers portal.
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