What is a Salary Sacrifice scheme?
It means that an employee formally changes their contract, agreeing to a reduction in their cash salary in return for the same amount in childcare vouchers. As long as their salary doesn′t drop below the lower earnings limit, an employee can opt to take up to £243 per month maximum in childcare vouchers. This has been calculated on the basis of 53 weeks x £55 divided by 12 and rounded up to the nearest whole pound.
The contract between company and employee must be updated to show the salary sacrifice agreement, clearly showing the agreed reduction in salary, the duration of the agreement and the amount to be received in vouchers.
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