A guide to salary exchange
Learn about the benefits of salary exchange, what to keep in mind, and examples of potential savings.
The opportunity to help your workplace clients
Workplace pensions are one of the biggest costs for employers. With recent increases in employer National Insurance (NI) contributions, paying workplace pensions via salary exchange can be an effective way to offset some of those costs.
Salary exchange (or salary sacrifice) is an arrangement where an employee agrees to give up a portion of their salary in exchange for increased employer pension contributions.
As the exchanged amount isn't paid as a salary, neither the employer nor the employee pays National Insurance (NI) on it.
Employers can use these savings to increase the contributions they make to their employees’ pensions or re-invest into their business.
Employees receive a higher pension contribution or take-home pay, depending on how the arrangement has been set up.
Considering salary exchange is an opportunity to help your workplace clients save money and improve their employee benefits package.
Key Documents
An employer guide to salary exchange (PDF)
This guide is great for introducing the benefits of salary exchange if your clients don’t already offer it.
An employer guide to setting up salary exchange (PDF)
This guide details key considerations for employers when setting up their arrangement.
Salary exchange guide for employees (PDF)
A comprehensive guide to help employees understand salary exchange and what they need to consider.
Resources
How we can help
We'll work with you to develop and implement salary exchange solutions that meet you clients' needs. Whether you're building a new scheme or adding salary exchange to an existing one, our tools and guidance can help you lead those conversations with confidence. Our Implementation Managers are on hand to support the new scheme set up process, once those decisions have been made.