The effect of salary sacrifice on other workplace benefiits?
Discussion
I understand that if your employer operates this then you can sacrifice part of your salary for another benefit - pension, car etc.
So what then is the figure used to calculate death in service or redundancy pay, or other salary based benefits? Is it your total pay or your new, lower, salary?
for example 100k , normal employer/employee pension contibutions, death in service @2.5x = 250,000
Sal sacrifice, salary 70k, employer pays 30k pension, is your dis figure now 2.5x 70k?
Nothing out of the ordinary, PAYE employee.
So what then is the figure used to calculate death in service or redundancy pay, or other salary based benefits? Is it your total pay or your new, lower, salary?
for example 100k , normal employer/employee pension contibutions, death in service @2.5x = 250,000
Sal sacrifice, salary 70k, employer pays 30k pension, is your dis figure now 2.5x 70k?
Nothing out of the ordinary, PAYE employee.
In every firm I've been involved in, DIS was calculated on your salary AFTER THE SACRIFICE. So, yes it is effected. Also, any mortgage you want to secure based on multiples of your salary will also be based on the lower salary.
But I've said this on here before I have been told I'm talking drivel. But that's my experience.
But I've said this on here before I have been told I'm talking drivel. But that's my experience.
TwigtheWonderkid said:
In every firm I've been involved in, DIS was calculated on your salary AFTER THE SACRIFICE. So, yes it is effected. Also, any mortgage you want to secure based on multiples of your salary will also be based on the lower salary.
But I've said this on here before I have been told I'm talking drivel. But that's my experience.
Just as with insurance policies, check your own documentation.But I've said this on here before I have been told I'm talking drivel. But that's my experience.
softtop said:
Who cares what HMRC thinks? They have nothing to with insurance levels or getting a mortgage?
Agreed, but they provide the rules for what the company can do.MustangGT said:
Beetnik said:
Different employers will use different rules so you'll need to check your contract and any variations to same.
Is the correct answer, HMRC allows either.Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff