Accurx gives eligible staff the option to take part in a salary exchange pension arrangement.
Salary exchange is a tax break that enables you to make savings on your pension contributions. It’s a government scheme, already offered by 85% of large companies, that saves you money by adjusting the way your pension contribution is paid.
In a non salary exchange arrangement, you get paid, then you pay income and NI tax on your salary, before then putting money into your pension.
With salary exchange, you ask Accurx to pay your pension contribution on your behalf, before you get paid your salary. Accurx does this, and takes your pension contribution off the amount they pay you. This is the ‘exchange’ - Accurx has paid your pension contribution in exchange for some of your salary.
When you then pay NI tax on your salary, you pay NI tax on a lower amount as it no longer includes your pension contribution. Your original salary before your pension deduction is often referred to as your ‘reference’ or ‘notional’ salary.
This ‘reduction’ in pay is therefore only a ‘theoretical’ or ‘hypothetical’ reduction and for any formal confirmation of your pay – for example for a mortgage application – Accurx will provide any enquiring party with your pre-reduction salary.
For lower rate taxpayers, no longer paying National Insurance on your pension contributions means 10% of your pension contribution gets added to your take home pay.
For higher rate taxpayers, it’s 2%. But, being in salary exchange also has an additional benefit for some higher rate taxpayers. It means you no longer have to submit a tax return to claim your full tax relief. In a salary exchange scheme, the relief is given immediately at your highest rate of tax.
By participating in salary exchange, you understand that you are authorising Accurx to pay your pension contribution directly into your pension for you and to reduce your gross (total) salary by an equivalent amount. In the event of your pay or pension contribution changing whilst you are employed by Accurx, the amount of your salary exchange will also change pro rata. Please note that this will be reflected in your payslip following your pay change.
Salary related benefits provided by our company will be maintained on your pre-reduction reference salary (subject to the HMRC limits on that benefit).
You should seek advice if you are, or are likely to receive statutory benefits or payments. Read more here.
All eligible staff will be defaulted into a salary exchange arrangement on joining the pension scheme. If you do not wish to participate in the salary exchange arrangement then you will need to opt out via your Maji account. Please note that if you choose not to participate in salary exchange you will not benefit from the savings available.