Salary sacrifice for pension

[Balance wheel]

Hopefully, I never work for you!

I don’t like your attitude, your fired in all seriousness I don’t hire anyone only subbies so your safe

[noTAGlove]

I don’t like your attitude, your fired

Haha. If you can arrange redundo from my employer, I'm definitely game.

[M1011]

That's what we do.
We had the choice to pocket the NI reduction or pass it on to the employee.
We chose the latter.

z

Yes I understand the function, to clarify my point is that the employer incurs a cost by offering that money to the employee as the status quo would see it in the companies pocket. So it's admirable, but not zero cost, and that's an important distinction to be mindful of for folk requesting that employers-NI to top up their pension. The only scenario in which it's truly zero cost is the niche scenario described previously.

[noTAGlove]

The only scenario in which it's truly zero cost is the niche scenario described previously.

Nothing niche about salary sacrifice, whether salary or bonus.

From HMRC's point of view it is all earned income and can be sacrificed accordingly.

[M1011]

Nothing niche about salary sacrifice, whether salary or bonus.

From HMRC's point of view it is all earned income and can be sacrificed accordingly.

What? That's not remotely the point I'm making..

The point I'm making is the only niche scenario where it's zero cost to the business to hand over the employers NI is in the scenario where an employee would only make the pension contribution IF the employer NI is offered, and without the employer NI being offered they would opt to not contribute those funds to their pension. In that scenario, they're either paying the employer NI to HMRC or the employee, so it's genuinely zero cost.

In the much more likely scenario where the employee is going to make the pension contribution either way (which is the case per the OP it would appear), it's evidently not zero cost to the company to hand over extra equivalent to an employer NI tax charge that they're no long actually incurring. They're literally making a payment that had no legal obligation to make. A nice thing to do, but it's unrealistic to describe it as zero cost.

Probably goes without saying, but this is unrelated to employees NI reduction which automatically benefits the employee when using salary sacrifice.

I hope that's clarified my point.