Salary sacrifice is a deduction initiated by the employee and is set up as a deduction. To set up a salary sacrifice you will need to:
Go to the employee record for the employee that you want to create the salary sacrifice for and under the 'Pay Run Settings' section click 'Pay Run Inclusions' > click on 'Add' on the right side of 'Deductions'.
You will see the following page where you will need to complete the following details:
- Select Salary Sacrifice Pension from the drop down menu under 'deduction category'.
- Enter the deduction amount to be applied per pay run. It can be a 'Fixed amount' or a 'Percentage of Gross'. If you chose fixed amount you will need to enter the fixed amount in £'s and if you choose percentage of gross you will need to enter the percentage.
- You should set the priority if there is more than one inclusion.
- Select whether the deduction should be paid manually or to a bank account.
- Select how the preserved earnings should be used from the drop down menu. Preserved earnings are a fixed pound amount that is used to indicate the minimum amount an employee must be paid before a deduction can be made.
You will have the option to choose 'Never', 'Once a minimum net earnings limit has been reached' or 'Once a percentage of net earnings limit has been reached'.
If you select once a minimum net earnings limit has been reached you will need to enter the preserved earnings amount (per pay run) or once a percentage of net earnings limit has been reached.
You will then need to set what to do if the amount is not reached: Do not pay the deduction or to Pay the deduction up to the preservation limit.
- Apply a note if you would like this deduction to have a note attached on the employee's pay slip.
- Please state when you want this pay run inclusion to start and when it should expire.
- Click save.
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