A salary sacrifice is an agreement initiated by the employer and to be agreed by an employee to reduce an employee's entitlement of a cash payment in return for a non-cash benefit.
This guide aims to outline the process of adding salary sacrifice when processing Payroll. In this case, the employee has a £22,000 annual salary and needs to apply a £2,000 salary sacrifice.
Head to Employees > View.
Click on the employee you would like to apply Salary Sacrifice to then head to the Salary details tab.
Update the Gross annual pay to reflect new Annual pay. (Gross annual pay - Salary Sacrifice).
When processing the employee's wage, the system will calculate the basic pay based on the Gross annual pay.
Head to the Pension details tab and tick the Salary Sacrifice check box.
Complete the Nominal annual salary field adding the original annual salary.
(Be aware that pension contributions will be calculated based on the the Nominal annual salary not the Gross annual pay value).
When generating a Payslip for the employee, both the Nominal annual salary and the Gross annual pay will be displayed.
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