Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Recruitment & retention
    • Wellbeing
    • Occupational Health
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Recruitment & retention
    • Wellbeing
    • Occupational Health
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise

Latest NewsEconomics, government & businessFlexible benefitsHR strategyFlexible pay

Salary sacrifice dangers outlined by consultants

by dan thomas 13 Apr 2005
by dan thomas 13 Apr 2005

There are significant financial advantages to implementing salary sacrifice schemes, but companies need to consider the potential pitfalls, experts have warned.


Salary sacrifice involves employees giving up part of their taxable pay in exchange for a non-cash benefit â€“ typically additional pension contributions â€“ to gain from tax and/or National Insurance (NI) contribution savings.


For example, employers can achieve savings of up to 12.8% on employee NI contributions via salary sacrifice.


But while the benefits are considerable, so are the risks of getting it wrong, warned Morag Prosser, senior consultant flexible practice at business consultancy Watson Wyatt.


She said that companies need to be acutely aware of those groups who could be adversely affected by salary sacrifice – those close to retirement, those on or near the minimum wage, those close to the maximum benefit and those on statuary pay.


Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

“Getting the structure right is crucial,” Prosser said. “Reduced basic salary could also impact on bonus, overtime, life insurance and salary increments so defining the salary these are based on is crucial.


“Communication is also vital,” she added. “Salary sacrifice can be a win-win situation for employer and employee, but employees need to feel informed of and involved in the decision-making process. Transparency as well as the ability to opt out are essential.”

dan thomas

previous post
Western Europe pays the price in employment costs
next post
Union considers action as equality policy leads to council pay cuts

You may also like

Trainee GP who displayed Palestine flag sues for...

17 Sep 2025

Graduates face ‘white-collar’ recession in jobs market

17 Sep 2025

Ben & Jerry’s co-founder quits over Unilever’s social...

17 Sep 2025

Inflation unchanged at 3.8% in August

17 Sep 2025

Tech firms to plough £30bn into ‘AI Growth...

17 Sep 2025

Retirement at risk – why we all need...

17 Sep 2025

Sky to cut 600 jobs as it ‘reshapes’...

17 Sep 2025

MPs reject Lords’ amendments to Employment Rights Bill

16 Sep 2025

Failure to prevent fraud: Only 29% training staff...

16 Sep 2025

The rise in ‘workplace fawning’ and how it’s...

16 Sep 2025

  • Workplace health benefits need to be simplified SPONSORED | Long-term sickness...Read more
  • Work smart – stay well: Avoid unnecessary pain with centred ergonomics SPONSORED | If you often notice...Read more
  • Elevate your L&D strategy at the World of Learning 2025 SPONSORED | This October...Read more
  • How to employ a global workforce from the UK (webinar) WEBINAR | With an unpredictable...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits Live
Employee Benefits
Forum for Expatriate Management
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Recruitment & retention
    • Wellbeing
    • Occupational Health
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise