What is salary sacrifice?

Salary sacrifice

Salary sacrifice lets your employees swap some of their salary for a non-cash benefit — like childcare, groceries, or a bike for commuting.

It can be a great way to help your team make big savings on life’s essentials and spread the cost of larger purchases.

Any salary your employees choose to sacrifice is deducted before tax and National Insurance is calculated.

Employees don’t pay any National Insurance on salary sacrifice benefits, but some tax may be due*
Some benefits offer tax savings too!
Some benefits offer employer savings via National Insurance

*any tax that’s due can be applied each month by payrolling, or at the end of the year via P11D

Salary sacrifice is a powerful employee benefit, and its benefits to your business go beyond the obvious.

Gives your employees bigger savings than regular discounts
Can often be combined with promotions for extra savings
Lets you offer a broad range of benefits, so there’s something for everyone
Great for staff retention — lowers the cost of living for employees at your company
Some employees may discover “hidden benefits” — for example, their salary after deductions may mean they qualify for additional government benefits like childcare support