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Where Taxpayers and Advisers Meet

Drafting a salary sacrifice agreement...

Dave-A
Posts: 127
Joined: Wed Aug 06, 2008 4:10 pm

Drafting a salary sacrifice agreement...

Postby Dave-A » Fri Nov 24, 2017 4:40 pm

...for pension contributions.

Hello folks,

Does anyone know if I need to include any special clauses in a salary sacrifice agreement we are about to offer our staff?

I intend to suggest up to 10% of salary could be sacrificed. Is there a limit ?

I intend to make the agreement a binding one for 12 months. Is this necessary, or reasonable?

I intend that the employee needs to sign one form only. Someone suggested it had to be two forms. Could anyone confirm?

Thanks and regards,

Dave-A

AmanSood
Posts: 215
Joined: Mon Jan 09, 2017 4:12 pm

Re: Drafting a salary sacrifice agreement...

Postby AmanSood » Thu Nov 30, 2017 5:54 pm

Hi Dave-A

One form is fine and doesn't need to be two form.

Having the employees elect to participate once a year is fine but think you should try and make this flexible on life events which may require an employee to stop making contributions for a period.

There's no limit but depending on the amount the employees earn, they may exceed their annual allowance which would cause them to pay additional taxes on their self assessment tax return. Also, employees should not sacrifice too much such that their earnings fall below the NMW threshold.

Hope this helps.

Aman
Advising on UK employment, expatriate and personal taxes
aman.sood@e-taxconsulting.com.
+44 (0) 207 846 0155


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