Create a salary sacrifice deduction

1. Go to Company on the bottom left-hand side, then Pay Elements.
2. Select the Salary Sacrifice tab, then New.
3. Complete the new salary Sacrifice deduction as follows:

   Reference	This will automatically assign and you can't change this.
   Description	Enter the name for your salary sacrifice deduction. For example, Electric car scheme, Childcare vouchers or Cycle to work scheme. NOTE: The description character limit is 30 characters.
   Is this for Childcare Vouchers?	If this deduction is for childcare vouchers, select this check box.   It's important to select this for childcare vouchers. Enter the relevant earnings amount and maximum amount of tax relief within the employee's record.

4. Select OK, then OK.

You've now set up your salary sacrifice deductions. 

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Assign a salary sacrifice deduction to an employee

If you want to assign a salary sacrifice deduction to a group of employees, you can use the Global Changes option. Global changes: deductions

1. Go to Employee, Double-click the relevant employee.
2. Select the Employment tab, then Pay Elements.
3. Go to the Salary Sacrifice tab.
4. In the Scheme Name column, click the drop-down arrow.
5. Select the required element pay element, then OK.
6. Complete the scheme information as follows:

   Sacrificed Amount	Enter the pre-tax, pre-NI amount your employee has agreed to sacrifice from their salary each pay period. For example, an employee you pay monthly takes out a cycle to work scheme for a total amount of £1,200 over one year. Their sacrificed amount is £100 per month.
   Total Amount	Enter the total amount the employee has agreed to sacrifice. This is the total to deduct, and not the amount per pay period. This is applicable to fixed amount deductions, such as electric car schemes or cycle to work schemes, only. For childcare deductions, this column displays N/A. If the deduction is ongoing and not based on a total amount, leave the Total Amount as £0. This way, your software deducts the Sacrificed Amount each period until you change the Sacrificed Amount to £0. NOTE: After your software deducts the total amount in full, the salary sacrifice no longer applies. If your deduction stops too early, check the correct Total Amount is correct.
   Childcare?	This completes automatically depending on the type of deduction you've selected.  If it's incorrect, you must amend the setting of the deduction at company level.
   In Use	From the drop-down list, choose whether the deduction is currently active. An employee can only have one active deduction for childcare at a time.
   Date joined Childcare voucher scheme	If the employee has a salary sacrifice deduction for childcare, you must enter a date here. Enter the date the employee joined the scheme, not the date you enter the details into your software.
   The Relevant Earnings amount for Childcare vouchers is	For childcare vouchers starting on or after 6 April 2011, conduct a basic earnings assessment to determine the employee's tax relief. The relevant earnings are an employee's gross taxable pay, less their personal allowance for the year. For more information, refer to HMRC's FAQs. From the drop-down list, choose the relevant earnings level.
   The maximum amount of tax relief is	This appears automatically upon completion of The Relevant Earnings amount for Childcare vouchers is box. It displays the maximum tax exempt value for the employee, based on the employee's pay frequency and your software legislation settings.

7. To assign another salary sacrifice deduction, repeat steps 4 to 6.
8. Select Save, then Save.
9. Select Close.

You've now assigned a salary sacrifice deduction to an employee. 

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Reports

HMRC required these sacrifice arrangements appear as a negative payment on the employee's payslip, however on all other reports, they appear with deductions.