what is a salary sacrifice scheme
The idea behind this is quite simple. You give up part of your salary and, in return, your employer gives you a non-cash benefit, such as childcare vouchers, or increased pension contributions. Once you accept a salary sacrifice, your overall pay is lower, so you pay less tax and National Insurance. Because your salary is lower as a result of salary sacrifice, any life cover through a scheme at work could be less if itâs based on your lower salary. 2  Itâs worth checking â some employers do provide life cover at your original salary so you donât lose out.