NMW, NLW and salary sacrifice warning

Major changes to the tax and national insurance contribution (NIC) treatment of most benefits in kind provided through salary sacrifice came into effect in April 2017. As a reminder, the rules have no impact on pensions and employer-provided pensions advice; childcare vouchers and employer-provided childcare; cycle to work schemes; qualifying ultra low emission cars; and additional holiday/flexible working arrangements.

For these benefits, employers need to ensure they pay attention to how any salary sacrificed in exchange for the benefit affects the calculation of wages for the national minimum wage (NMW)and national living wage (NLW).