Save money through giving your employees the benefit of a salary sacrifice scheme
As a business leader and decision-maker, you want to balance your bottom line with rewarding your employees fairly. Through implementing a salary sacrifice pension scheme for your employees, both you and your people win. You optimise your business’s financial structure while elevating your employees’ retirement prospects. Here, we highlight the strategic advantages that a salary sacrifice pension scheme can offer both your business and your employees.
Employer savings
Your employees pay into their pension fund before tax, meaning you pay less in national insurance contributions. You can choose what to do with these savings – whether channel them into another part of your business, invest them or even add them straight into your employees’ pension pots.
Streamlined administration
While auto-enrolment simplifies participation, a salary sacrifice scheme streamlines administrative processes while bestowing lasting financial benefits. It aligns well with businesses seeking both ease of management and substantial employee advantages.
Amplified employer contributions
In a salary sacrifice scheme, employer contributions are calculated based on the pre-sacrifice salary. This means that both employer and employee contributions experience an uplift, facilitating accelerated growth of the pension fund.
Tax-efficient employee benefits
A salary sacrifice pension scheme wields exceptional tax efficiency. Employees effectively reduce their taxable income and subsequent tax payments. This contrasts with the auto-enrolment scheme, where contributions come from post-tax earnings. So, even if they contribute the same percentage into their pension scheme, they will end up with a higher net salary at the end of each month.
It is particularly beneficial for higher-rate taxpayers, who can realise considerable tax savings while boosting their pension fund. At the other end of the spectrum, the scheme can lead to reduced student loan payments, as lower taxable income translates into decreased repayments.
Attracting and retaining talent
The attraction of a salary sacrifice pension scheme can significantly enhance your talent acquisition and retention efforts. By demonstrating a commitment to your employees’ long-term financial wellbeing, your business becomes a more attractive destination for top-tier talent.
Help from the experts
Navigating the world of employee benefits requires informed decisions that help build your company’s financial health as well as shaping your workforce’s financial future. To embark on a journey towards an elevated benefits strategy, connect with us to explore the customised advantages of a tailored salary sacrifice pension scheme.
Moore Kingston Smith have partnered with Husky to offer an end-to-end process which provides a complete administration, governance and consulting service making it simple to implement and administer through automation.