A Guide to Salary Exchange
Salary exchange pension scheme is a great way for both employees and employers to save tax and national insurance contributions.
A salary exchange pension scheme works when an employee agrees to a reduced salary in exchange for an additional non-cash benefit, normally in the way of a higher pension contribution from their employer, saving the employee up to 12% on the exchanged amount and 13.8% for the employer.
There are specific HR rules and considerations when implementing these schemes, so we always recommend seeking advice prior to implementing.
We at JWL Accountancy, our payroll and tax team have plenty of experience in implementing salary exchange schemes, and recently implemented one for a client with 12 employees, saving the employer £2,900, in national insurance contributions.
Below is our free guide for more information: