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Article By Husky

As a founder, you watch your costs closely. 

At 15%, Employer National Insurance is one of the biggest costs that comes with growing your team. What many business owners do not realise is that there is a simple and fully compliant way to reduce it. 

It is called Salary Sacrifice. 

Here is how it works. 

Instead of an employee paying pension contributions from their salary after tax, they agree to reduce their salary by that contribution amount. The employer then pays it directly into the pension. 

Because the contribution is taken before National Insurance is calculated: 

The employee pays less National Insurance.
The employer pays less National Insurance. 

The pension contribution stays the same. But both sides save. 

For growing businesses, those savings can add up quickly. As your team expands, so does the impact. A 10-worker business with average salaries of £45,000/year would save around £3,375 a year on National Insurance, whilst saving employees around £200 on their NET pay, for example. 

Salary Sacrifice can help you: 

• Reduce employer National Insurance costs
• Increase employee take home pay
• Improve the value of your benefits
• Make pensions feel like a positive part of employment 

There is one important point. It must be set up correctly. Proper documentation and payroll integration are essential. 

When done properly, Salary Sacrifice becomes one of the smartest and simplest financial improvements a small business can make. 

If you are a MYCO client and want to understand how this could work for your company, Husky can review your current setup and explain the savings clearly. 

Sometimes the easiest wins are the ones hiding in plain sight. 

Do you have any questions, you can book a call with Husky’s team: https://calendly.com/husky-workplace-pensions/myco