Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Mon, 29 Apr 2024 13:22:36 GMT by nizBo8
Hi, Everything I have found online/been told anecdotally/been advised by payroll providers suggests that if an employee contributes to their pension through salary sacrifice (thus meaning that the full contribution becomes the employer's contribution), and goes on maternity leave, then the employer has to carry on making the full contribution - either for the full leave period, or at least for the period where the employee is in receipt of Statutory Maternity Pay. However, I can't find any statutory information or legislation to confirm this position. Is it the case that it comes down purely to the individual employer's scheme rules, and all employers err on the side of caution by continuing to pay the total salary sacrifice contribution while an employee is on maternity leave? Is anyone aware of any ET cases where this has been tested? Thanks
Posted Tue, 07 May 2024 10:30:36 GMT by HMRC Admin 8
Hi,
You would need to check the contractual agreement to see if you are still required to make the payments.
But you are correct that you cannot deduct a salary sacrfice from the SMP.
Thank you.
Posted Wed, 15 May 2024 10:49:27 GMT by Geek
If you are operating a salary sacrifice scheme, you have legally changed the employee contract and reduced the salary in exchange for a benefit in kind at the cost of the employer. This must be maintained whilst an employee is on statutory leave so not to cause a breach of contract, discrimination, constructive dismissal etc and there are multiple tribunal cases that involve maternity. The employer manuals offer a lot on this, 2 of which are: https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim42766 https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim42753

You must be signed in to post in this forum.