Boost your Take Home Pay | Salary Sacrifice Explained UK

Salary Sacrifice is a term you may have come across or is a term that you should look out for because it can do wonders for you when you it comes to helping you save for your Pension. In this episode we will be looking at
- What is Salary Sacrifice
- How Salary Sacrifice Works
- The Pros and Cons too

What is Salary Sacrifice?
It basically means giving up part of your salary, which might sound crazy at first but you don't do it because you want less money. you do it as part of an exchange for a non-cash benefit from your employer, such as increasing your pension contributions.
Now the most common salary sacrifice scheme is to do with Pension Contributions however it does vary between employer, and other schemes include company cars, life insurance cover, critical illness cover etc. So do check with your employer for their benefits plan. We will be focusing on Pension Contributions as this is the most common but this video is still helpful even if your thinking of using the scheme for a different benefit.
Also as the name suggests, you need to be earning a salary to be eligible for this. So you do need to be employed as this isn't applicable to those who are self-employed

Chapter Information (Salary Sacrifice Explained)
0:00 Introduction
0:30 What is Salary Sacrifice?
1:31 How does Salary Sacrifice Work?
2:22 Why Salary Sacrifice?
5:33 Salary Sacrifice Workplace Pension Example
10:40 Pros
11:42 Cons

▶Financial Madness: Salary Sacrifice Excel Sheet:

DISCLAIMER - Any advice or (statements perceived to be advice) given in this video and any other videos on my channel are for information purposes only, and does not act as financial advice. Your are fully responsible for your financial decisions. If you are in need of Financial Advice, please seek out a professional advisor. If your are unsure on how to do this, feel free to reach out to me and I am more than happy to guide you.

#SalarySacrifice #WorkplacePension #SalaryBoost

[stardustangel]

Thank you for the clear and detailed explanation. Loved the mathematic breakdown

[swatimalu]

Very easily explained. Anyone can understand from this.

[traceythomas]

Excellent video. Very informative. The chart was a really good way to see comparisons between the two...

[officeboyreloaded]

Hey dude, love your channel, I think it's worth rerecording or trying to optimize the audio in the video. It's hard to hear without headphones while making dinner if you catch my draft :D.

Keep up the good work, have a nice day !

[yurica]

Any particular difference with scenario 1 and 2 on the spreadsheet, as I'm entering the same salary and it's giving me 2 differents number for pension contributions and take home pay. thanks!

[maxinecourtney]

Your video was very helpful and easy to follow. Thank you.

[curiousjoe]

Great video. With Salary Sacrifice, does your pension provider still fetch the extra 20% from HMRC? I assume not as you never paid any tax on this...

[kingsleyajike]

Thanks for the video! very clear explanation :)

[vikramsharma]

Lovely content thank you. Did struggle with audio though

[aashishlimaye]

I am really struggling to figure if the pension is any good, if I am not sure whether I will be in the UK after 5 years. Would you be able to shed some light on that please?

[mohamedpatel]

Good video but doesn't take into account the lower threshold for pension contributions of either £120 per week or £6240 per year. Wouldn't the pension contributions be reduced?

[daadirabbi]

Thank you for your information but I've a question about this topic I pay every each month Auto Enrol SE ERs And Salary sacrifice where these money goes?

[bayingjase]

How can your examples both show £750 for employer contribution? 3% of £23, 750 is £712.50. That is a HUGE reduction in employer contributions thst significantly affects our bottom line. Really helps our employer a ton though!

[angrymuffinsb]

I feel so thick. I still don’t fully understand. I have a company car. How will that affect it?

[Demetha_Khuba]

Hi, nice video! With regards to salary sacrifice and calculating tax and NI contributions based on the amount left over after taking out the salary sacrifice amount, does that apply only if using salary sacrifice for pensions contributions, or is that the same principle if the salary sacrifice is being used for another type of benefit such as health insurance?

[ericmarillier]

Thanks for the amazing content. I'm trying to link Salary Sacrifice to you other stream on Higher Income Tax Bracket. If you pay your pension through Salary Sacrifice is there an opportunity to claim the extra tax relief, 20% boost you mentioned?

[TheNinjasDen]

Hi mate, can you please explain how Sal Sac would work for high rate tax payers? Apparently you don't need to bother with HMRC tax forms?
Many thanks.

[Jjshah]

Do the reduced NI contributions affect state pension? As in could it mean you might not have made enough contributions once you reach state pension age?

Many thanks.

[ChristopherAtkinson-qzfk]

How does salary sacrifice affect what you receive from Universal Credit?

[abbicampbell]

I tried to work this out for myself and my take home with the salary sacrifice is less than without. Has this happened to anyone else?