Right now the employee and employer pay National Insurance on the gross salary. They then separately contribute to the workplace pension. But if the employer paid their employees workplace pension directly and the employee reduced their gross salary by that amount, then both the employer and employee pay less National Insurance.
It’s all down to Salary Exchange. It means more cash in your employees’ pocket each month, potentially more pension in their pot when the time comes and more cash left in your business.
That’s a lot of mores.
See the savings your company could make tomorrow with our Salary Exchange simulator.
Salary exchange is a simple, administrative change to how your company manages workplace pensions. It costs the business nothing, reduces your tax liability – and is an easy way to help staff boost their retirement savings.
Let’s look at an example of how salary exchange benefits the business and staff.
John’s gross annual salary is £30,000. You, as his employer, pay the legal minimum into his pension – as does he. This means that, each year, John contributes £1,188 and you contribute £712.8, for a total of £1,900.80.
With the switch to salary exchange:
And it doesn’t cost you a penny.
Salary exchange delivers value to the business and staff, but the admin can be complex depending how your workplace pension scheme was set up. With Husky, it’s easy to make this win-win tweak.
We’re proud to be a recognised leader in the pension technology space. With our cloud-based workplace pension platform and employee app, the entire salary exchange process is seamless.