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Salary sacrifice agreement

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Our Salary Sacrifice Agreement establishes a clear and formal arrangement for employees to voluntarily exchange part of their salary for specific benefits or contributions.

Reading time
How long to understand and implement this template?
5 mins
Word count
How many words in this template?
226
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What is a Salary sacrifice agreement?

This Salary Sacrifice Agreement facilitates the formal agreement between an employer and an employee regarding salary sacrifice arrangements.

It outlines the terms, benefits, and implications of reducing an employee's salary for non-cash benefits like pensions or childcare vouchers.

The purpose is to ensure clear understanding and compliance with agreed-upon adjustments, promoting a transparent and mutually beneficial arrangement.

Best practice timescale for this to be issued
When should this template be issued?
To be signed prior to the salary sacrifice being actioned
Issued by who, to whom
Who should issue this template, and to whom?
The Employee to the Employer (you)
Applicable legal jurisdictions
In which jurisdictions can this template be used?
Great Britain & NI (United Kingdom), Worldwide

What legislation and best practice guidelines have been taken into account in the development of this template?

United Kingdom

  • Income Tax (Earnings and Pensions) Act 2003: Defines the tax treatment of salary sacrifice arrangements and benefits.

  • National Minimum Wage Act 1998: Ensures that salary sacrifice does not result in employees earning less than the minimum wage.

  • Equality Act 2010: Prohibits discriminatory practices in salary sacrifice agreements based on protected characteristics.

  • Pensions Act 2008: Regulates pension contributions, including those made through salary sacrifice.

  • Data Protection Act 2018 (incorporating GDPR): Requires personal data shared in salary sacrifice forms to be handled according to data protection principles.


Other territories

Consult your jurisdiction's employment legislation or labor laws to ensure compliance with the template. Review the language for local precision.

Salary sacrifice agreement

Employee Information

Full Name:  
Department:  
Job title:  

Salary Sacrifice Benefit Details

Chosen Benefit:  
Start Date of Arrangement:  
Duration of Arrangement:  
Amount to be Sacrificed (per pay period):  
Total Amount to be Sacrificed (if applicable):  
Brief Description of Chosen Benefit:  
Agreement Period (if different from Start Date):  
Any Specific Conditions or Notes:  

Tax and Financial Implications Acknowledgment

I understand that participating in the salary sacrifice arrangement may have tax and National Insurance contributions implications. I acknowledge that I have been advsed that I may wish to seek independent financial advice to understand the potential impact on my personal financial situation.

Declaration

By signing this form, I agree to the terms and conditions outlined in the Salary Sacrifice Policy. I confirm that the information provided in this form is accurate to the best of my knowledge.

Employee Signature:  
Date:  

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Salary sacrifice policy

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Salary sacrifice agreement
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