Help Centre for Employers

How does salary sacrifice work?

Salary sacrifice can be used to save national insurance (NI) for both employee and employer.

The process involves the employee giving up a part of their pay and the employer then making a payment to the pension scheme equal to the amount given up.  The effect is that the employees pay is reduced by the amount given up and it is this lower amount that is used to calculate how much NI is payable.

NB. This is not the same as an Additional Voluntary Contribution, which is paid by the employee.

 

NOW: Pensions is supportive, easy for our employees to understand and uncomplicated in terms of its implementation. Its structured approach removes the complicated investment choices & makes auto-enrolment a straightforward and simple process. — Mark Manaton, Managing Director, Blue Arrow Group
“We were impressed with the simplicity of its scheme. The ease of implementation was also a big plus for us and has removed much of the administrative headache.” — Neil Tune, HR director at Fitness First
…We pride ourselves on our abilities to make the perfect match for both clients and workers. Our decision to appoint NOW: Pensions came as a result of wanting a quality workplace pension scheme that is structured, simple and easy for us to… — Ian Naylor, Legal Director of Randstad
I've known ATP for many years and have enormous respect for the effectiveness of their investment strategy. I'm convinced that NOW: Pensions can become a major player in the UK and look forward to being a part of that success. — Chris Daykin, the former Government Actuary
I'm excited by the opportunity to help bring to the UK auto-enrolment market NOW: Pensions, a customer-friendly and responsive trust-based alternative to NEST and to contract-based offerings. — Chris Daykin, the former Government Actuary