Maximising pension contributions via salary sacrifice could help balance NI hikes – Hymans Robertson

Huge savings could be made by employers who offset the impending increase in employer National Insurance contributions (NICs) by moving to salary sacrifice for their staff pension contributions, according to Hymans Robertson.

For every £100,000 of salary employees sacrifice into their pension, the saving in employer NICs will be £15,000 from 6th April.

The firm said employers should seriously consider implementing this change which benefits both employers and staff.

The pensions and financial services consultancy said that for those employers who do not have the system set up it’s simple to do.

For employers that already have a salary sacrifice system in place, the focus should be on encouraging staff to maximise their pension contributions.

This will help to minimise the NICs cost increases for employers in early April.

The rise in employer NICs, from 13.8% to 15%, will come into effect on 6th April.

On this day, the threshold at which NICs are paid will drop by nearly 50%, from £9,100 to £5,000 – adding a further burden on employers’ ability to balance the books.