The idea behind salary sacrifice pension is simple - but what will you save?
The process is simple - instead of making personal pension contributions with your gross income, you can exchange a portion of it to be paid as salary sacrifice pension contributions.
This method is generally more tax efficient because instead of your provider topping up your contributions, you receive the savings directly at the point of payment.
You can read more about this here, in one of our other articles.
For most, the overall savings will be as follows:
- Employment costs - 13.8% Employer NI, 0.5% Apprentice Levy
- Employee PAYE Tax - 20% up to the relevant banding, and 40% for higher rate earners
- Employee NI - 12% up to the relevant banding, and 2% after that.
Not all umbrella companies pass on the full savings from employment costs, as they retain a percentage portion of the employer NIC saving. This is sometimes on top of an additional weekly margin quoted for the pension service, so the costs can rack up quickly!
At Nasa, we are pleased to pass on all of the savings that we make, so that you can maximize the benefits and grow your pension fund. This means all of the saved employment costs are passed to you, and you wont see any surprise charges or fees.
Our weekly margin is quoted during your onboarding, and if you decide to add in pensions in later down the line, the maximum charge applied by us if £5 per week.