Salary Sacrifice Readiness Checklist
Work through each item to assess whether salary sacrifice is right for you.
0 of 10 items completed
1. Understand how salary sacrifice works
Confirm you understand that salary sacrifice reduces your gross salary in exchange for higher pension contributions, and that both tax and NI are saved.
2. Check if your employer offers salary sacrifice
Not all employers offer this arrangement. Ask your HR department whether salary sacrifice is available and what the specific terms are.
3. Calculate your potential tax savings
Use a salary sacrifice calculator to see how much Income Tax and National Insurance you could save based on your current salary and proposed sacrifice amount.
4. Consider the impact on mortgage and loan applications
Lenders assess your income when deciding how much to lend. Reduced salary could affect your borrowing capacity. Get independent financial advice if needed.
5. Check how salary sacrifice affects benefit entitlement
Reduced salary may impact means-tested benefits like Universal Credit, Housing Benefit, or Tax Credits. Check with your local authority or benefits adviser.
6. Review your pension Annual Allowance
Ensure your total pension contributions (including employer contributions from salary sacrifice) do not exceed the Annual Allowance (£60,000 for 2024/25).
7. Check your pension scheme rules
Understand any restrictions on salary sacrifice in your workplace pension scheme, including minimum or maximum contribution limits.
8. Compare with regular contribution methods
Calculate whether salary sacrifice provides better value than making regular pension contributions after receiving your full salary.
9. Understand when changes can be made
Salary sacrifice arrangements are usually irrevocable until the next tax year or after a life event. Make sure you can commit to the arrangement.
10. Check impact on life insurance and sick pay
Reduced salary may affect death-in-service benefits and sick pay. Review your employer policies to understand any implications.
Next Steps
Once you have assessed whether salary sacrifice is right for you, take action: