National Minimum Wage
An employee's cash pay mut not be reduced below the NMW. For lower-paid employees this may affect eligibility or the amount they can sacrifice.
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Schemes Available Through My Group
Salary sacrifice is one of the most tax-efficient benefits you can offer your staff, and with employer NI now at 15%, the savings on both sides have never been more meaningful.
Cycle to Work
Staff can choose a bike, and the cost is spread over several months through a reduction in their gross salary. The scheme benefits from a specific HMRC exemption. For employees who cycle regularly, the saving is visible from the first month, and for employers it supports both employee health and sustainable commuting without adding to payroll costs.
Electric Vehicle Salary Sacrifice
Employees lease a brand-new electric car through a deduction from their gross salary, before tax and NI are applied. The monthly cost typically includes insurance, maintenance and road tax, so employees know exactly what they're paying. Leases of up to five years are available, as well as second-hand EV options help make the scheme accessible to all staff members. For employers, My Group's EV salary sacrifice scheme includes protections that cover most life events, so you're not left holding a vehicle lease if an employee leaves.
Home & Electronics
Employees spread the cost of home appliances, technology and electronics: white goods, laptops, tablets, smartphones and more, through a salary deduction over a fixed period. No credit check required. For employees who need to replace an essential appliance unexpectedly, or who want to spread a significant purchase without using a credit card or taking out a loan, this is a practical and genuinely useful alternative. Home and electronics schemes typically operate as a net pay deduction rather than a full salary sacrifice arrangement, which affects the level of tax saving compared to cycle to work or EV.
How It Works
An employee will agree to give up part of their gross salary in exchange for a benefit provided by their employer. Because that sacrifice happens before tax and National Insurance are calculated, both the employee and employer pay less NI on the sacrificed amount. In some cases, the employee can also pay less income tax too.
The employer will then use the sacrificed amount of salary to fund the benefit. The employee pays nothing upfront, and the cost comes out of their pay each month, but because it reduces their taxable salary, the effective cost is lower than buying the same thing outright.
For a basic rate taxpayer, the combined income tax and NI saving on a cycle to work scheme is typically around 32%. For an electric vehicle, the savings can be significantly higher.
What to Know Before You Launch
Salary sacrifice schemes are straightforward once set up, but there are three things worth understanding upfront:
Impact on Statutory Pay
Because salary sacrifice reduces gross salary, it can affect statutory maternity pay, statutory sick pay and state pension entitlement.
Contractual Change
A documented change to the employee's contract is required, covering the duration of the sacrifice and the conditions for amendment.
Why Employers Are Prioritising This Now
With employer National Insurance rising to 15% from April 2025, every pound of salary sacrificed reduces your NI liability as well as your employee's. For organisations with a significant number of employees using a scheme, that saving is material, and some employers choose to pass part of it back to employees to make the schemes even more attractive.
Salary sacrifice schemes also give you something tangible to offer across your workforce. Cycling to work, driving an EV, replacing a broken washing machine without a loan, these are things staff members genuinely value, and the benefit is felt in day-to-day life rather than only when something goes wrong.
Everything in One Platform
Salary sacrifice schemes sit under the My Group Portal alongside discounts and savings, recognition tools, health and wellbeing support, and financial wellbeing services.
Employees can access everything through one login, making the overall package easier to communicate and more likely to be used.
