Sports Centre Membership Salary Sacrifice Scheme FAQs. What is salary sacrifice?

Sports Centre Membership Salary Sacrifice Scheme FAQs.
What is salary sacrifice?
A salary sacrifice happens when an employee gives up the right to part of their salary. In return the employer will provide a
non-cash benefit, which will not be subjected to tax or national insurance deductions. Further information surrounding
salary
sacrifice
can
be
found
on
the
HM
Revenue
&
Customs
(HMRC)
website:
http://www.hmrc.gov.uk/specialist/salary_sacrifice.pdf
As you reduce your gross pay by the salary sacrifice amount you only pay tax and NI on the reduced salary, this may
generate a saving to you.
Am I eligible to join the scheme?
In order to be eligible for the scheme you must adhere to these strict rules:



Be employed by the University of Essex, UECS or WHH Ltd for the duration of the contract;
Be on a permanent contract or fixed term contract;
Be paid on a monthly basis.
Other limitations apply:



1
Your gross salary pay MUST NOT fall below the minimum wage threshold at any time during your employment,
after the salary sacrifice deduction. If this occurs then you will be removed from the salary sacrifice scheme based
in order of priority set by the HR and Payroll department at the University of Essex. Please see the priority list
below;
1. Pension Plus
2. Day Nursery
3. Childcare Vouchers
4. Cycle Scheme
5. Essex Offers
6. Sports Salary Sacrifice Scheme
Salary sacrifice cannot be deducted from any statutory benefits therefore if you are on maternity leave, parental
leave, adoption leave or long term sickness this may affect your salary sacrifice. If this happens please contact HR
immediately;
When agreeing to the Terms and Conditions you are signing up to a 12 month contract and therefore will be tied in
for the full 12 months. You will only be able to leave the scheme on its anniversary, every 12 months, or due to
very specific ‘life changing events’1 accepted by the HMRC.
Please see ‘What are the qualifying lifestyle events?’ section below
How do I join the scheme?
If you wish to join the scheme, please visit the Essex Sport website at: http://www.essex.ac.uk/sport/membership/. Follow
the link and complete the online form: Before completing the form. Please make sure you have read and fully understand
the Terms and Conditions. Those who do not wish to participate in the salary sacrifice scheme can choose the direct debit
option. If you would prefer this option, please visit the Sports Centre at Colchester Campus, or Evolve gym at Southend
Campus.
What to do if I am not eligible to join the scheme.
If you are not eligible to join the scheme as your current working status does not adhere to the guidelines, then you are still
able to join the Sports Centre at Colchester Campus or Evolve gym at Southend Campus, via a direct debit scheme or by
purchasing your membership in full.
If you receive notice that your salary sacrifice arrangement has not been accepted you will be contacted by the sports team
and will be invited to join via the direct debit scheme
How long is the contract and what happens if I wish to leave the salary sacrifice scheme?
When you enter the scheme you are signing up to a 12 month contract. If you wish to renew your memberships then you
must sign up again through the website once your membership has expired, you will be contacted by the sports team prior to
the expiration of your membership. If you wish to leave the salary sacrifice scheme you will only be able to do this every 12
months or due to a very specific ‘life changing event’ accepted by the HMRC.
If you are leaving due to a lifestyle event please fill out the salary sacrifice opt out form, which can be found online along
with the terms and conditions. Once complete, please take this form to HR at your earliest opportunity.
What are the qualifying lifestyle events?
In order to be able to opt out during the course of the year this must be due to a lifestyle event which has been agreed upon
with HMRC. These are:







Birth or adoption of a child;
Commencement of, or return, to work after maternity, paternity, or adoption leave;
Long term sick leave;
Divorce / separation;
Commencement of unpaid leave for over two weeks;
Return from unpaid leave;
Full-time to part-time or part-time to full-time employment.
What if I wish to change my membership?
If you wish to change your membership you will only be able to do this during the annual anniversary period and you must
contact HR at your earliest convenience. However if you wish to upgrade your membership this can be done by contacting
the sports team and making a one-off payment.
How do I renew my membership?
Once your membership is up for renewal you will be required to reapply again through the website
[http://www.essex.ac.uk/finance/forms/sign-up-form.aspx]. Before you reapply for salary sacrifice please read the terms
and conditions.
How will it affect other benefits and entitlements?
A salary sacrifice agreement reduces your basic salary and therefore may affect other benefits and/or entitlements, which
are calculated based on your basic salary. For example: State Pension, Statutory Maternity Pay, Statutory Sick Pay,
Incapacity Benefit, Working Tax Credit and Child Tax Credit.
If you are unsure how your benefits and entitlements may be affected you are advised to seek independent financial advice.
Your local Jobcentre Plus will be able to advise you on working tax credits and child tax credits.
The Human Resources Section will be happy to talk you through any implications for maternity pay. If you are pregnant,
you are advised to request a meeting at the earliest possible opportunity.
Price changes for memberships
Prices will be reviewed on an annual basis and up to a 5% increase will come into effect on 1 August each year. Staff will
be notified during July of forthcoming prices increases.
How much could I save?
The amount of money saved by joining the salary sacrifice scheme is dependent upon several factors (salary, income tax
code, national insurance code, etc). The examples below show what you could potentially save when you pay for your gym
membership through salary sacrifice.
Please see below for example payslips. Example 1 is an example payslip of an employee who pays for their sports
membership through the old scheme salary deduction (no longer available). Example 2 is an example payslip of the same
employee, however here they pay for their sports membership through salary sacrifice.
Example 1 – The below example shows the payslip of a member of staff who pays for their gym membership through
salary deduction.
Payroll Name
University of Essex
Paydate 28/05/2014
Employee Name
Miss Jane Dough
Tax Period
Tax Code
N.I Number
N.I Code
Reference No.
4003158
Payments
Description
Basic
Pension Plus
Deductions
Time Rate
Cash
Description
2350.12 Tax
-176.26 NI - D
USS Regular
Evolve +
2
1000L/0
JS452589D
D
This Period
Cash
Description
Cash
268.00 Taxable Payments
157.60 Pensionable Pay
0 Employers Pension
21.75
2173.86
2350.12
552.28
Year-to-Date
Tax Paid YTD
NI Paid YTD - D
Taxable Pay YTD
Niable Pay YTD
ERS Pension YTD
Student Loans YTD
Employer's NI YTD
Payments
2173.86 Deductions
447.35
Net Pay
Paid By
1726.51
BACS
Example 2 – The below example shows the payslip of a member of staff who pays for their gym membership through
salary sacrifice.
Payroll Name
University of Essex
Paydate 28/05/2013
Employee Name
Miss Jane Dough
Tax Period
Tax Code
N.I Number
N.I Code
Reference No.
4003158
Payments
Description
Basic
Pension Plus
Evolve +
Deductions
Time Rate
Cash
Description
2350.12 Tax
-176.26 NI - D
-21.75 USS Regular
2
1000L/0
JS452589D
D
This Period
Cash
Description
Cash
263.60 Taxable Payments
155.29 Pensionable Pay
0 Employers Pension
2152.11
2350.12
552.28
Year-to-Date
Tax Paid YTD
NI Paid YTD - D
Taxable Pay YTD
Niable Pay YTD
ERS Pension YTD
Student Loans YTD
Employer's NI YTD
Payments
2152.11 Deductions
418.89
Net Pay
Paid By
1733.22
BACS