The way that salary sacrifice pensions are displayed on the payslip is very confusing for employees. Firstly the employer pension contribution is listed under deductions, but it is not a deduction. While the amount is not included in the total for deductions, this is misleading as fundamentally an employer contribution is not a deduction. Seconding in a salary sacrifice scheme it is important that the employee contribution is treated as a reduction in gross pay, in order to comply with HMRC guidelines. In the Kashflow payslip, the salary sacrifice contribution is not shown as a reduction in gross pay, but instead as a deduction. I am not sure this is then compliant with HMRC. The guidance would suggest the payslip should follow the format in the attached example.
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