Salary sacrifice enables people to exchange part of their salary for a non-cash benefit from their employer, such as increased pension contributions, but people can also give up salary in return for benefits such as bikes, mobile phones and bus passes.
With National Insurance increasing by 1.25 percent in April, salary sacrifice is a way to help people keep more of their hard-earned cash in their pockets.
By essentially giving up a portion of someone’s salary, the amount they get paid is reduced – which decreases the amount of income tax and National Insurance they pay.
Although take home pay will be reduced, the money will be put into their pension which will benefit them in retirement and less is taken through tax.
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