What are the key things to consider when setting up salary exchange?

An overview of the key factors to consider when setting up salary exchange.

Salary exchange isn't suitable for everyone. We go into each of these in detail in separate articles but there are some things you should think about before setting up a salary sacrifice arrangement:

  • National Minimum Wage (NMW) - You can't reduce an employee's salary below the NMW rates, now or in the future. Mintago helps businesses monitor this but ultimately businesses need to ensure that this is not breached when introducing any type of employee benefit.
  • Zero-hours contracts - Mintago does not currently accept companies/staff members who are on zero-hours contracts. 
  • Notional Salary - A notional or reference salary is the employee’s salary before salary sacrifice. You would use this figure to calculate pay rises and holiday pay, however, for statutory payments, loans and mortgage calculations, the post salary sacrifice figure is used. 
  • Employees who are off work - If an employee is in receipt of maternity pay, you will have to continue to pay employer pension contributions in line with their employment contract.
  • Administration - When done without Mintago, salary exchange creates extra administration. We handle all of the administration for you, allowing you and your employees to just enjoy the savings.