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 employees salary below the NMW rates, now or in the future. Mintago helps businesses monitor this but ultimately businesses need to ensure that across benefits this is not breached.
  • 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 exchange. You retain this for employees for the calculation of other benefits such as Life cover & pay rises etc. The ‘reference salary’ is also quoted for mortgage calculations.
  • Employees who are off work - Even if the employee doesn’t get sick pay or maternity pay, you may have to continue with their pension contribution, in line with their contract of employment. 
  • 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.