As an employer, you'll pay lower National Insurance contributions (NICs) on your employees' reduced salaries. To get an idea of the amount you stand to save, simply multiply the amount your employees pay into the scheme (which, in this example, is the amount we are assuming your employees are exchanging) by the current employer NIC rate of 13.8% for the 2024/25 tax year.
You are free to choose how to use any employer NIC saving. One way to increase scheme take-up would be to redistribute some of your NIC saving to your employees to supplement their pension provision.
| Average annual employee payments (gross amount) | £1,500 |
| Number of scheme members | 100 |
| Total | £150,000 |
| Employer NIC rate | x13.8% |
| Your annual saving | £20,700 |