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Posted Tue, 06 Sep 2022 10:55:38 GMT by Lyna Zhang
Hi If we rent out property to employees, and make agreement to deduct the rental & bills from their salary, are their normal salary fully taxable before the deductions? The deductions would be after tax & NIC ? Is it right?
Posted Tue, 06 Sep 2022 14:43:00 GMT by HMRC Admin 17

It depends on your agreement.

We would need to know if it is a salary sacrifice arrangement or not.

You can find information on salary sacrifice here:

Salary sacrifice for employers   .

Salary sacrifice is a contractual change where the employee gives up the right to salary normally in exchange for a benefit in kind .

If it is a salary sacrifice, this is deducted first, and the remaining salary is put through the payroll for tax and national insurance .

If there is no salary sacrifice agreement, then the deduction comes from the net pay  .

Thank you.

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