Why business owners can’t ignore Salary Exchange in 2024
For directors navigating the complexities of company finances, one crucial element that cannot be ignored in 2024 is Salary Exchange.
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Maximising Childcare Support
Navigating the £100,000 Earnings Threshold
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How employers can help with the cost of living going up
One such avenue, gaining traction for its dual advantage, is Salary Exchange.
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Husky turns workplace pensions into the employer's super power

Husky is the sole independent workplace pension platform in the UK. Husky’s team has invested in technology that integrates your pension, payroll, salary exchange and compliance into one system to improve the financial well-being and save your business time and money.

SAVE TIME. SAVE MONEY

Pension setup and management

Husky handles the setup, can also facilitate the transfer of your existing pension scheme, and end-to-end management service ensures precise handling of every aspect of your workplace pension.

Husky has partnered with multiple providers for preferential rates. You can u
se Husky’s comparator tool to get preferential rates. 

Pension setup & management

BE COMPLIANT. NOT CONFUSED

Compliance management and breach rectification.

Husky becomes your pension administrators, reducing compliance liability by auditing the scheme’s compliance at every payroll run. Husky provides ongoing pension support and liaise with the Pensions Regulator on your behalf.

EMPLOYERS SAVE MORE. STAFF GET MORE

Salary Exchange (Salary Sacrifice)

In 2024, Salary Exchange isn’t just a buzzword; it’s a fundamental shift in how businesses manage their finances. Companies are usually seeing nearly £2000 in savings on National Insurance contributions, while employees are enjoying almost £6000 in additional annual income.

salary exchange husky benefits
Payroll

ALL YOU NEED IN ONE PLACE

Easy Payroll

Payroll processes have remained largely unchanged over the past decade, but it’s time for an upgrade. Husky has consolidated payroll, workplace pensions, and salary exchange under one umbrella, offering a comprehensive solution.

Husky's journey

husky journey

Gain some valuable insights

Understanding the 2024 National Minimum Wage

Understanding the 2024 National Minimum Wage: Changes, Impacts, and What You Need to Know 

The minimum wage for workers aged 21 and over is increasing from £10.42 to £11.44 per hour, a significant 9.8% rise aimed at helping workers ...
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National Insurance Cut 2024. Essential Insights.

National Insurance Cut 2024. Essential Insights.

The National Insurance (NI) will be reduced for both employees and the self-employed in 2024, marking the second cut this year. The recent announcement in ...
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don't ignore salary exchange in 2024

Why business owners can’t ignore Salary Exchange in 2024

In the dynamic landscape of business, staying ahead of the curve is not just an advantage—it’s a necessity. For directors navigating the complexities of company ...
Read More →
Understanding the 2024 National Minimum Wage

Understanding the 2024 National Minimum Wage: Changes, Impacts, and What You Need to Know 

The minimum wage for workers aged 21 and over is increasing from £10.42 to £11.44 per hour, a significant 9.8% rise aimed at helping workers ...
Read More →

Award-winning solution

Best-Workplace-Pension-Compliance-Solution
husky award 2023

Here are the frequently asked questions

If you have more questions you can always access our knowledge base on this link

Employers must automatically enrol all new and eligible employees who are:  

  • aged 22 to state pension age
  • earning over £10,000 a year
  • Working or ordinarily work in the UK  
  • Not already part of a qualifying workplace pension scheme

For Auto-Enrolment (AE) purposes, an employer only needs to assess and enrol UK workers into a scheme. Therefore, as an employer, you need to assess if a worker is working or ordinarily works in the UK under their contract. 

Working in the UK: If a worker works wholly in the UK, then they can be considered to be working in the UK. By working wholly in the UK, The Pensions Regulator means:

  • the worker’s contract provides for the worker to be based at a location in the UK, and the worker does, in practice, work all the time in the UK, and
  • there is no simultaneous employment relationship between the worker and an employer outside the UK (e.g. the worker is not someone who has been sent to the UK by an affiliated employer, for example on a secondment.)

Ordinarily working in the UK: Where a worker is not wholly working in the UK (the work they do is also done outside of the UK), it will need to be established if the worker ordinarily works in the UK.

In most cases, workers who fall into this category will be workers who do not have one fixed workplace (for example, they move around in their work). To decide if a worker ordinarily works in the UK, an employer needs to consider:

  • If the worker is resident in the UK
  • where the worker begins and ends their work
  • where the worker's headquarters in
  • whether they pay NI and or tax in the UK
  • the currency they are paid in
  • the worker's contract of employment
  • seconded workers

More details can be found here.

If you have a worker that should be exempt from AE due to not working in the UK, please enter that into Husky's system so that the worker is not assessed for Auto-Enrolment. 

Qualifying earnings is a band of earnings used to calculate pension contributions used by most employers.
 
Under qualifying earnings, contributions are calculated based on a part of your earnings. In the tax year 2022/23, the lower annual earnings threshold is £6,240 and the upper threshold is £50,270 (these are £520 and £4,189 monthly). That means that the first £6,240 isn’t included, so qualifying earnings can’t be more than £44,030 (£50,270 minus £6,240). 
 
Let's look at Jon as an example:
  • Jon earns £5,000 a month and contributes 5% into his pension and his employer contributes 3%
  • His monthly qualifying earnings would be £3,669.00 (£4,189 - £520)
  • Therefore, his pension contributions will be calculated as 5% of £3,669 and his employer contributions will be calculated as 3% of £3,669

You can find more details on how your pension contributions are calculated by logging into the Husky for Everyone app.

Yes, salary exchange can be introduced into an existing plan as well as new plans.

A salary exchange agreement can normally be altered, for example, if someone opts out of an automatic enrolment scheme with salary exchange.

For any other circumstances, it depends on how the agreement has been set up. It may be necessary to change the terms of a salary sacrifice arrangement where a lifestyle change significantly alters an employee’s financial circumstances.

This may include:

  • changes to circumstances directly arising as a result of coronavirus (COVID-19)
  • marriage
  • divorce
  • partner becoming redundant or pregnant

What are the benefits of a Salary Exchange scheme?

  • Employers save on NI contributions while employees can save on tax as well as NI contributions.
  • Employers can reinvest any NIC savings in their business or their employees’ pension plans.
  • Employees receive a higher pension contribution or take-home pay, depending on how the arrangement’s set up.
  • Employees can benefit from a bigger retirement fund, if NIC savings are reinvested back into their plan.

Are there any possible drawbacks to a Salary Exchange scheme?

  • Lower life cover (employers generally calculate entitlement as a multiple of salary which would be lower)
  • Lower borrowing available on mortgages (as per life cover the borrowing level is determined by a multiple of a lower salary)
  • Entitlement to state benefits eg Statutory Maternity Pay and the State Pension may be affected if your salary falls below the level at which you pay National Insurance contributions.
  • The employee might not be able to revert to their old (pre-sacrifice) salary if personal circumstances change. The employer would have to agree to a further change to the employee's contract of employment.

Those savings can be re-invested into the employee’s workplace pension pot to provide an even better employee benefit and encourage them to join.  With Husky, you can also split those savings into specific %s so you can share the savings between the company and the employee.

You should speak to your tax credits office before you decide whether to participate in a Salary Exchange Scheme. You must also notify your tax credits office once you have exchanged your salary.

However, in broad terms, as your gross salary reduces (and employer pension contributions are disregarded) your entitlement to tax credits may increase. If you currently make personal contributions to a pension scheme, then you are currently entitled to deduct the gross amount of the pension contribution from your earnings to calculate your tax credits. In this situation, therefore, there should be little or no change to your tax credits entitlement.

Leaving a salary sacrifice exchange is always an option, and you should be able to do so without penalty if the arrangement isn’t working for you.