Salary sacrifice

Salary sacrifice is where you give up some of your salary in return for a benefit, such as childcare vouchers, pension contributions or a bike under a cycle to work scheme. The salary you are giving up is taken off before income tax or National Insurance is worked out and deducted, so you only pay tax on what's left.

Top tips

  • Find out what arrangements your company has in place for salary sacrifice opportunities, such as childcare vouchers or a cycle to work scheme.
  • Taking part in a salary sacrifice scheme may affect your entitlement to certain State benefits, so make sure you check this out. For example, if your company offers you childcare vouchers it may affect the amount of tax credits you can get.
  • You won't be able to take part in a salary sacrifice scheme if your reduced salary takes you under the national minimum wage.

 

 

  • If you are a member of the Harmsworth Pension Scheme you can give up some of your salary in return for national insurance savings.
  • The tax relief you get on a salary sacrifice scheme may be restricted up to a maximum amount.

 

 

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