What does running a salary sacrifice scheme involve?

Whenever an employee changes the amount of Ladybird Vouchers they receive, you need to amend their salary so that their total pay (i.e salary plus Ladybird Vouchers) is unchanged.

Your regular Ladybird Vouchers invoice will highlight any new scheme members and any employees who have changed their voucher amount, so that your payroll adjustments are as simple as possible.

Childcare vouchers don't need to be shown on payslips, but the amount of salary which has been sacrificed should be shown. This can be done by showing the full salary with an appropriate reduction or deduction.

Salary Sacrifice schemes need to be approved by the Inland Revenue, which is normally straightforward. However, this cannot be done in advance of the scheme starting, so we suggest that you seek approval when the first employee joins your scheme. We can assist you by providing a letter for you to send to your tax office. We will also keep detailed records of the scheme which you can request a copy of at any time.

For any salary sacrifice scheme to be fully effective it must be offered to all employees, offering to a select few will invalidate any salary sacrifice scheme.

The minimum wage must also be adherred to when an individual partakes in a salary sacrifice scheme, Ladybird checks all applications to ensure HMRC rules are met in all areas.

Can Salary Sacrifice schemes affect other employee benefits?

Salary Sacrifice schemes can affect other benefits, such as overtime, pay rises and company pension schemes. We suggest that you retain a record of each employee's full salary (i.e their reduced salary plus their Ladybird Vouchers). Where possible, you should ensure benefits are based on the full salary (notional salary) rather than the reduced salary. You may need to contact your company pension scheme trustees in order to make this minor amendment to the scheme rules.