Birkbeck, University of London Human Resources

Salary Sacrifice

The salary sacrifice scheme must be operated in accordance with government guidance for such schemes in order for staff to benefit from the tax free savings on the cost of a bike.

This means that you accept a reduction in your gross salary for a non-cash benefit (i.e. the cycle hire for a 12 month period). Savings are achieved from tax and NI contributions due on this amount.

Depending upon your income, accepting a salary reduction may affect other income related state or pension benefits.

The change in your salary is a contractual change for the hire period and is reflected in the hire agreement.

Other possible impacts of joining a salary sacrifice scheme

The difference in your gross salary and reduced salary may be relatively low  but other benefits may be affected depending upon your personal circumstances

For example, if you are in receipt of state related benefits such as working tax credit or other earnings related benefits, you should seek advice to ensure you will benefit from the scheme. For more information contact the Inland Revenue advice line on 0845300 3900 or Human Resources.

Pension benefits with USS and SAUL should not be affected by being a member of the salary sacrifice scheme. Pension contributions and benefits are based on 'notional' salary, this is your gross salary before any reduction is made. If a mortgage provider, rental agency or other organisation requires confirmation of gross salary, we will provide them with your ‘notional’ salary and your reduced salary.

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Date printed: 27/11/2020