How does salary sacrifice work for pension contributions?

Salary sacrifice for pension contributions is a way for an employee to give up some of their salary and have it added to their pension pot instead. You can read more about how salary sacrifice works on our website.

Setting up your worker group

If you’re using salary sacrifice, you should set up a worker group with just an employer contribution, making sure this meets the total minimum contribution level. As you’re paying pension contributions on behalf of your employees, we wouldn’t expect to see an employee pension contribution.  For more help with this, please see our ‘Quick guide to Online Services’.

Salary sacrifice must not take the employee’s salary below the minimum wage. For more information please see HMRC guidance on salary sacrifice.

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