Salary Sacrifice Schemes
Our salary sacrifice schemes provide opportunities for Durham University staff to save money in a number of ways.
These schemes are salary reduction arrangements which give us a smarter way to fund employee benefits as well as increasing your take-home pay, by reducing the amount of National Insurance contributions you pay.
Before applying for any of our salary sacrifice schemes, we strongly advise that you carefully read the FAQs below to ensure that you will benefit from the use of these schemes.
Our current salary sacrifice schemes are:
Please use the links above to find out more information about each of these schemes and how to apply.
It's very simple. In salary sacrifice schemes, members of the scheme agree to give up part of their gross (before tax) contractual salary equal to the cost of any part of the above schemes, and the University then pays this contribution on their behalf.
This means that you no longer have to pay National Insurance (NI) contributions on the amount you have given up and your take-home pay will increase. The amount of savings depends on how much you earn and also which of the above schemes you choose to take advantage of. Use of salary sacrifice schemes will not affect your income tax position or your tax code.
Most employees will benefit through use of salary sacrifice schemes, but there may be a few for whom it is not advantageous. However, there is no need to worry as we have put in place a number of safeguards to ensure that those who may be adversely affected are not enrolled into a salary sacrifice scheme.
If any of the situations listed below apply to you, then you may not benefit from using salary sacrifice and you must assess whether you still wish to apply for any of the above schemes.
Those who may not benefit include:
- Staff members who earn less than the Earnings Threshold for National Insurance as you would not make any savings and may see your State benefits affected.
- Staff members who are claiming Universal Credit as you may find that this is affected.
- Staff members who are entitled to Working Tax Credit as the reduced salary figure (after the deductions) is the figure used when calculating your entitlement to these credits.
If any of the above apply to you, you can check the impact directly by using the HMRC Helpline: 0845 300 3900.
Others who may not benefit include:
- Staff members on fixed term contracts as, depending on the length of your contract, you may find it is not beneficial to participate. If you have further questions about this please contact Payroll & Pensions: email@example.com.
- Although the University does not pay below the National Minimum Wage (NMW), there may be staff whose pay could fall below the NMW by participating in any or all parts of the above schemes.
A pay protection limit is in place to ensure that no employees are worse off through accessing the above schemes. If your earnings will fall below the pay protection limit or the NMW due to a new salary sacrifice application, your application will not be processed and you will be advised of this.
If your earnings fall below the pay protection limit or the NMW in the future (for example, due to a change in your contract), your salary sacrifice will then be taken from your net pay (after tax) rather than your gross pay. This means that you will no longer make the NI savings.
Salary sacrifice schemes are available to all employees from day one of their employment. They are not available to workers, such as those on a casual hours contract.
Staff on fixed term contracts can normally access Pension+ and Nursery+ but, depending on the length of their contract, it may not be beneficial to participate. If you have further questions about this please contact Payroll & Pensions: firstname.lastname@example.org.
Due to the 12-month repayment period, our Cycle to Work scheme is not available to those with a fixed term end date that is less than 12 months away. Our Cycle to Work scheme is also not available to those who have resigned or intend to resign in the next month.
Use of any of the above schemes will not affect your pension contributions or any other salary-related payments or benefits that you receive from the University, such as salary increases, bonuses and overtime. These will be based on your reference salary which is your annual salary before any salary sacrifice deductions are taken.
You will keep the same salary sacrifice arrangements while you are on maternity/paternity/ adoption/parental leave, unless it is not beneficial to you. If there is any risk that you may be disadvantaged by any of the above schemes whilst on leave, you will be automatically opted out until you return.
When you advise the University of your intention to take any of the above leave, HR can advise you on your options. If you have any further queries please contact Payroll & Pensions: email@example.com.
Your reference salary is your annual salary before any salary sacrifice adjustment. The reference salary is the amount used to calculate your other salary-related benefits including salary increases, bonuses and overtime. It is also the amount used in any personal official letters (mortgage letters, loan applications, job references etc.)
The figure shown on your payslip will be 1⁄12 of your reference salary plus any other contractual or non-contractual payments, less an amount equal to your normal monthly pension contributions and any other contributions made through salary sacrifice arrangements. This is also technically known as your gross contractual salary.
If you have further questions about the effect of salary sacrifice on your pay, please contact Payroll & Pensions: firstname.lastname@example.org.
If you have further questions about the various salary sacrifice schemes, use the links above to visit the dedicated webpages for each scheme.