Salary Deductions & National Living Wage Legislation
All staff benefit schemes give you the opportunity to buy good and services. Payment for any goods and services is made either through salary sacrifice or a net deduction.
However, making these payments should not take you below the government’s National Living Wage (NLW) rate.
From April 2024, the government’s NLW rate set a minimum threshold of £11.44 per hour. This has affected some people with salary deductions as the salary they received on payday in April fell below the NLW threshold and could continue to do so in subsequent months depending on their future earnings.
We are now seeking guidance from HMRC around Staff Social Club deductions.
What does this mean for staff affected – will I lose my Staff Benefit?
No. Staff will keep the staff benefit their salary deduction is attached to. There will be no change to the cost of the benefit or any of the terms or conditions under the existing arrangement.
How does that affect my salary?
The payroll team will carry out a check of your salary deductions after payday and if your pay (after the deductions) breached the government’s NLW threshold, we will ‘refund’ you the amount below the threshold on payday. These checks and refunds (where appropriate) will occur each month whilst we continue to assess the situation and seek advice from HMRC.
Please make sure you set aside any ‘refunds’ as you will need to pay that amount back to the Trust. We are working through this complex situation and will share further details about paying back ’refunds’ to the Trust as soon as possible.
If you receive financial help/support from the government such as Universal Credit, this could be impacted as a result of the ‘refund’ payment.
If you are successful in obtaining any event places/tickets/vouchers it is advised to notify us to so we can arrange an alternative method of payment, rather than the charge going through your salary. This payment can be made online, via a secure link on Trust pay date (usually 28th each month). Please consider this before applying for any events that may drop you under NMW.
For more information, please see the below Trust wide communications circulated Friday 10th May 2024.
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