Salary Sacrifice Schemes
Also known as salary exchange, salary sacrifice is an arrangement made available by employers to their employees by which they reduce their earnings in return for non-cash benefits. They help to create a more flexible employee benefits package and are used by companies of all sizes to help drive better employee engagement.
What are Salary Sacrifice Schemes?
Salary sacrifice schemes work by reducing an employee’s salary in exchange for a benefit. Many of these schemes are government backed like Childcare Vouchers and Cycle to Work schemes, others can be provided to your employees as optional remuneration. By sacrificing part of their pay, which is taken directly from payroll, employee can access a wide range of benefits, services or home technology products.
Which Salary Sacrifice Scheme?
Salary sacrifice schemes, such as childcare vouchers, cycle to work and green cars, provide tax savings to both employee and employer which companies choose to use in various ways. Some use the savings to pay for the administration of the schemes, others fund additional employee benefits or increase the value of the salary sacrifice benefits on offer.
For more information on salary sacrifice and examples of schemes, please visit HM Revenue and Customs.
Cycling to work is an easy and cost-effective way to commute and thanks to salary sacrifice, there’s never been a better time for your employees to ditch the car and use pedal power. It saves them money and keeps them fit all through active travel. To get yours up and running we offer both the Evan Cycles and Halfords Cycle2Work scheme.
The benefits for your employees
- Makes their daily commute cheaper
- It’s greener – reducing their carbon footprint
- It promotes a healthier lifestyle
- Provides the employee tax and national insurance savings
- Allows employees to spread the cost of a new bike over 12 months
The benefits for the employer
- Easy to set up and run
- Cost-free benefit
- Open to all your employees
- Reduces demand on car parking
- Reduces the organisations carbon footprint
- Provides savings on employer NI
Our Childcare Voucher Scheme can help save parents up to £933 a year (for basic rate tax payers). As long as they are state registered, or Ofsted approved, employees are able to choose their own childcare provider or nursery. Employers save money via lower NI contributions and, by allowing employees to sign up to a childcare scheme before April 2018, can provide employees with greater choice when the governments Tax-Free Childcare scheme (TFC) comes into effect.
Car Salary Sacrifice
Cars with ultra low emissions will be unaffected by the changes to car salary sacrifice announced in the 2016 autumn statement. Our car salary sacrifice scheme allows employers to provide their employees access to a brand new fully maintained and insured car at a lower cost than they could normally achieve in the retail market.
Why offer Car salary sacrifice?
- Employees get fixed cost motoring with a fully insured and maintained, ultra low emission car
- No deposit or employee credit checks required
- Access to lower cost motoring than is available on the retail market
- Reduces the carbon footprint of your workforce
- Schemes run at no cost to the employer
Home Technology Salary Sacrifice
Salary Sacrifice schemes for home technology will play a significant role in closing the UK’s digital skills gap, which is costing an estimated £63 billion per year in lost GDP. Our research shows that 70% of employees who participated in a home technology salary sacrifice scheme believe the scheme has helped them and their family to improve their IT skills and knowledge. By offering home technology salary sacrifice schemes to employees you are helping to improve the IT literacy of employees and their families, as well as investing in the digital future of the country.
How it works
Your employees can access the latest home computing and top technology products through a technology salary sacrifice scheme. The scheme allows you to offer employees highly desirable smartphones and home technology products from Apple, Samsung and Hewlett Packard, making technology more accessible to all.
Your Holiday Trading scheme can allow employees to purchase extra annual leave by sacrificing part of their salary in return. This is provided through salary sacrifice, deducting the equivalent amount from an employees gross salary, providing the employer a saving on employers national insurance and saving the employee both tax and national insurance.
Introducing Our Hapi App
Want to know more
We’ll help you find the benefits and services that fit your business, create your Hapi app, launch the programme face to face with your employees and create a tailored ongoing adoption programme.Get in touch