Salary sacrifice is the agreement between an employer and employee where the employee gives up part of their gross salary in exchange for a non-cash benefit. This reduces their taxable income and means that both parties pay less in income tax and national insurance contributions (NICs).

With the recent employer national insurance hikes in effect since April, employers and directors will be reviewing their payroll strategies to minimise costs and maximise efficiency. An increasingly popular approach to consider is salary sacrifice, offering both tax benefits and enhanced employee rewards.