What is Salary Sacrifice

What is Salary Sacrifice?

This Salary Sacrifice scheme is provided by your employer in partnership with EmployeeChoice. The scheme offers you a convenient and cost-effective way to access the latest technology and mobile devices whilst saving on tax and national Insurance. Some key facts about the scheme are detailed below, alternatively please click the following links for more information

Frequently Asked Questions
Terms & Conditions

What is Salary Sacrifice?
Salary Sacrifice is the exchange of gross salary (pre income tax and National Insurance) for a product such as a computer or mobile phone. As a result of reducing your gross salary you pay less income tax and National Insurance which can provide you with substantial savings. These savings are demonstrated on the product pages within this portal.

Is there a maximum order value?
The maximum order value is set by your employer. The maximum order value for this scheme is £2,000. You can order multiple products but only up to this amount in total. Please note that your limit may be reduced if you are a current participant in this scheme. The limit will be reduced by your outstanding balance at the time of your application.

What is the length of this scheme?
This scheme runs for 24 Months so you will be committed to monthly gross salary deductions during this time.

When can I place my order?
You will be able to place your order on this portal between 12/10/2015 and 06/11/2015.

What if I change my mind?
A 14 day cooling off period begins from the moment your e-hire agreement is signed and returned, during this time you may cancel your order if necessary. However once the cooling off period has lapsed you cannot cancel your order.

When will I receive my device?
You will receive your item approximately 2 weeks following the end of ordering window. In the case of schemes open for orders all year round, products will be dispatched once your e-hire agreement has been returned and the cooling off period has passed. Please note we will not ship goods unless your hire agreement sent via email has been signed and returned..

Any questions?
We are here to help - If you need support to order online, need advice on which product best suits your requirements or if you have a question about the way the scheme runs, please get in touch with us. You can email us via email: info@employeechoice.co.uk or you can call us free on 01992 663999 . We are available from 8.30am to 5pm, Monday to Friday.

EXAMPLE

A standard rate taxpayer selects a £480 Computer on a 2 year scheme. By reducing the employees gross (pre tax) pay over 2 years, the employee saves paying 32% (20% Income Tax + 12% NI) on the £480.00, equating to a saving of £153.60.

As the employee is effectively hiring the computer from the employer during the scheme, income tax is due on the Annual Benefit in Kind (BIK) provided. The BIK amount is 20% of £480.00 (£96.00) per annum in each of the 2 years the benefit is provided. The employee pays 20% Standard rate tax on £96 ie £19.20 which is reported annually by the employer on the employees P11D. The employee therefore saves £153.60 less £38.40, so £115.20 or 24% during the scheme.

At the end of the scheme the employee has the option to Keep or Return the computer. By returning the computer the employee retains the £115.20 saving and receives a loyalty discount code for the next scheme. The discount is based on the trade in value estimated to be 10-20% of £480 after 2 years.

If the employee decides to keep the computer the 12% National Insurance Saving is retained (£57.60) but full 20% income tax on £480 needs to be paid to HRMC. As the employee will have paid £38.40 income tax already via Benefit in Kind (P11D) the balance due would be £57.60 collected by a final P11D and a slight tax code change for the following year.

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