Salary Sacrifice Agreement Template Uk

The idea is very simple. You forfeit a portion of your salary and, in exchange, your employer will give you a scriptural benefit, for example.B. child care cheques or higher pension contributions. Wage victims can affect the legal salary a worker receives. This can lead some employees to lose their rights altogether. The second entry in the list of examples of wage victims was amended to correct the reporting of the amount of taxable contributions to tax and insurance. However, employers should always check with their system provider to ensure that such rules are allowed. Other plans for wage victims are possible. The company manages a qualified pension plan that is available to you through a system of tax assistance on victims of wages. Under this system, you agree to sacrifice part of your salary in return for a contribution from the company on your behalf to a pension plan. If you agree with the wage victims` plan, the amount deducted from your salary is [amount]/[percentage] [each month] / [annual].

Your post-victim salary will therefore be 2.00 euros. If there is a point of legal uncertainty, you can contact the HMRC sharing team. The HMRC will not rule on a proposed scheme for pay victims until it is put in place. These benefits are exempt from income tax and/or NIC of employees and/or employers if certain conditions are met. In other words, if the relevant conditions are met and benefits are provided by victims of pay, the worker will have reduced tax liability and liability of the NICs and the employer will also save on the NICs. In-kind benefits that attract the tax benefits and benefits of NICs when they are offered under a wage victim plan are now limited following the introduction of new rules in April 2017. Subject to exceptions, in-kind benefits (taxable or exempt) granted by wage victims are charged to the employer`s income tax and NIC on the highest amount of the wage sacrificed and the statutory equivalent of cash (if applicable). If the usual taxable value of the in-kind benefit is greater than the amount of the allowance, it is normally subject to Class 1A taxes and niCs. Given the potential impact of the agreement on taxes and NICs, Her Majesty`s Tax and Customs Authority (HMRC) must be effective. In particular, HMRC will want to be convinced that the salary was sacrificed before the employee has the right to “collect” it fiscally. Further information is available on HMRC`s website at: This letter contains a general summary of how compensation plans work and key issues to consider.

These include sensitive issues related to maternity leave. While victims of wages are a matter of labour law, HMRC has an interest in determining the application of income tax and national insurance contributions (NIC) to the various elements of the employee`s remuneration package. If a victim of salary for income tax conversion and Class 1 niac has been introduced into a non-liquidable benefit with another income tax and NIC treatment (particularly where the benefit is exempt from income tax and NIC), HMRC must be satisfied that the wage victims` plan is effective. In summary, HMRC is concerned that for every element of the compensation package the worker receives from his or her job, the correct amount of income tax and NICs will be paid. Salary is a sacrifice if you agree to exchange a portion of your salary in order to receive additional benefits from your employer.