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Salary Exchange

Salary Exchange (sometimes referred to as Salary Sacrifice) is a mechanism which enables employees to forego future salary on the agreement that the values given up are paid as additional employer pension contributions. This method provides savings in both types of National Insurance (Corporate and Personal) and provides employees with immediate income tax savings at their highest rate.

The table below indicates the savings that can be achieved based on an employee exchanging 4% of their salary for Pension contributions.

Gross Salary

£30,000

£60,000

£110,000

Salary ‘exchanged’ (at 4%)

£1,200

£2,400

£4,400

Corporate National Insurance saving

£166

£331

£607

Personal National Insurance saving

£144

£48

£88

Personal Income tax saving

£240

£960

£2,640

Total amalgamated saving

£550

£1,339

£3,335

Figures correct as at March 2021 (and are subject to Government budgetary changes).

If you would like to discuss more about Salary Exchange or see how our interactive employee calculator can help you and your employees, please contact Nick Young at nyoung@jmurray.co.uk

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Details submitted through this form are confidential. We will process any personal information collected in this form in accordance with our Privacy notice. The information therein is used only to contact you to discuss the areas you've expressed an interest in. Please note the contents of this form is sent via email and therefore may not be secure.