Salary Sacrifice

Discussion in 'Home Life & Finances' started by Tangerinedream, Dec 13, 2007.

  1. Tangerinedream

    Tangerinedream Well-Known Member

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    Has anyone heard of it? Or anybody work in HR?

    I dont get it... you give up some of your take home pay in exchange for childcare vouchers? How much do you give up? What about pension etc?

    It sounds too good to be true :?
     
  2. Mum_2besoon

    Mum_2besoon Well-Known Member

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    Never heard of this before, is this something new your workplace has introduced?
     
  3. Tangerinedream

    Tangerinedream Well-Known Member

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  4. valentine

    valentine Well-Known Member

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    Hi Natalie,

    My OH's work offers it, its a pre tax thing - so you get more for your money. I think there's a maximum amount per month you can sign up for or they can take a certain amount or a percentage - I'm not sure as we haven't looked into this yet (despite my nagging!).

    So rather than pay for some of your childcare (it likely won't cover all of it) out of your after tax salary (from your bank account), some of it is paid in vouchers that are taken off your pay pre-tax, which means you get more for your money (and give less to the gvmt!).

    That's how I understand it anyway. I am mad as my workplace won't offer it, if your workplace and your OH's workplace offers it, you can take advantage of it twice (it might mean you have to rework how you organise your joint finances) and get even more for your money. I also think (from friends who use the scheme) that you manage it and pay your childcare provider (topping it up where necessary with cash/chq) via the online system.

    Hope that helps.

    Valentine Xxx
     
  5. Bagpuss17

    Bagpuss17 Well-Known Member

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    This has been around for a few years now, some companies over it others don't.

    If the company you work for offers it, you should seriously consider taking advantage of it because it saves you on tax and NI.

    Both myself and my DH take part in it at our companies. So money is deducted from our monthly salaries and is put into an account with the voucher provider (busy bees for example). We manage it online and set up an automatic payment to the nursery provider each month. Easy!

    Saves you a fortune in tax over the course of a year.
     

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