Create a salary sacrifice deduction

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

   Reference	This is automatically assigned and can't be changed.
   Description	Enter the name for your salary sacrifice deduction, for example, Electric car scheme, Childcare vouchers or Cycle to work scheme. NOTE: The description should be no more than 30 characters in length.
   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 so that you can enter the relevant earnings amount and maximum amount of tax relief within the employee's record.

4. Click 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. Double-click the relevant employee.
2. Click the Employment tab, then click Pay Elements.
3. Click the Salary Sacrifice tab.
4. In the Scheme Name column, click the drop-down arrow  
5. Select the required element pay element, then click 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.
   Total Amount	Enter the total amount the employee has agreed to sacrifice. 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. NOTE: Once this full amount has been deducted, the salary sacrifice will no longer be deducted. If your deduction stops too early, check the correct Total Amount is correct.
   Childcare?	This is completed automatically depending on the type of deduction you've selected. If it's incorrect, you must amend the settings 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, a basic earnings assessment must be carried out to determine how much tax relief the employee is entitled to. The relevant earnings are an employee's gross taxable pay, less their personal allowance for the year. For more information, please 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 the employee is entitled to, and is 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. Click Save, then Save.
9. Click Close.

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

TIP: If your employee also has a salary sacrifice pension scheme assigned, Sage 50 Payroll calculates the pension contribution using the pensionable pay before the other salary sacrifice arrangement is deducted.

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Reports

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