The chancellor is set to trim tax breaks on salary sacrifice schemes that allow workers to make pension contributions without paying national insurance.<\/p>\n
Rachel Reeves is expected to cap tax-free sacrifices at \u00a32,000 a year, according to reports<\/a>.<\/p>\n Staff putting away any more than that would have to pay the standard NI rate: 8% if they earn less than \u00a350,000 and 2% above that.<\/p>\n Find tips and deals in the Money blog<\/a><\/p>\n The plan would also limit an existing exemption for firms offering salary sacrifice schemes, which currently allows them to offer generous employer contributions.<\/p>\n Companies currently don’t have to pay the 15% employer national insurance tax on cash that goes into workers’ pensions.<\/p>\n What would it mean in cash terms?<\/p>\n A person earning more than \u00a3125,000 who sacrificed 20% could pay \u00a3460 more, while their employer could pay \u00a33,450 more, according to accountancy firm RSM.<\/p>\n Those on lower salaries would face a much smaller hit. A worker earning \u00a345,000 and sacrificing 5% would pay \u00a330 more, while their employer would pay \u00a334 more.<\/p>\n People earning between \u00a3100,000 and \u00a3125,140 could be affected the most, given they often use salary sacrifice schemes to sidestep a marginal tax rate of 60%<\/a> and to keep lucrative child benefits.<\/p>\n Read more from the Money blog:
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Why millions of Britons are off long-term sick<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The chancellor is set to trim tax breaks on salary sacrifice schemes that allow workers to make pension…\n","protected":false},"author":2,"featured_media":276357,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185],"class_list":{"0":"post-276356","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/276356","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=276356"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/276356\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/276357"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=276356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=276356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=276356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}