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Salary Sacrifice - Pension Contribution

We pay £600 per month to an employees personal pension scheme and have treated the payment as Salary Sacrifice through Sage Payroll.

The payment is deducted from Gross salary and the Income Tax and National Insurance amounts are therefore less than if it was made directly from Net pay.

The question is, are we able to make a payment to an employee's pension scheme (which has nothing to do with us as employer) through salary sacrifice or is salary sacrifice only available for contributions made to an employer-related pension scheme?

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By tom123
06th Jul 2012 16:52

Change of employment contract,

This is a change of employment contract, so needs to be correctly documented as such.

The critical thing with paying into a pension scheme is that the scheme knows the funds are from an employer rather than an employee, and hence the scheme does not claim tax releif on the employer portion.

As you are already paying out of 'gross' pay, no further tax relief is due.

 

I would hazard a guess that this is only available on schemes linked to an employer so that there is no double granting of releif.

 

 

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