What is salary sacrifice?

Salary sacrifice is an agreement between an employer and employee where part of an employee’s salary is exchanged for a benefit. Instead of receiving that amount in their monthly pay, the employee gets something of equal value.

You might be wondering — why not just buy the benefit directly?

The big advantage is that salary sacrifice is non-taxable. This means employees pay less Income Tax and National Insurance , making the benefit much more cost-effective.

Even better , the savings are applied immediately through payroll, so there’s no need to claim tax relief from HMRC — the benefits are felt straight away.