Q&As

Should sums sacrificed from a bonus by way of a salary sacrifice scheme be included or excluded for the purposes of calculating the gender bonus gap under the gender pay gap reporting regulations applying to private and voluntary sector employers?

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Published on LexisPSL on 27/09/2017

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • Should sums sacrificed from a bonus by way of a salary sacrifice scheme be included or excluded for the purposes of calculating the gender bonus gap under the gender pay gap reporting regulations applying to private and voluntary sector employers?
  • Statutory provisions
  • Non-statutory guidance
  • Analysis

A salary sacrifice arrangement involves an employee electing to forego (or ‘sacrifice’) a proportion of their salary or wages in return for their employer substituting a new or improved non-cash benefit, usually, but not always, one that attracts tax and/or National Insurance contributions (NICs) exemption.

The sacrifice may be made:

  1. on an ongoing basis, every pay period, in respect of basic salary or wages, or

  2. periodically when contractual or discretionary variable remuneration, such as bonuses, are in the offing

The legal effect of the change must be that the employee is entitled to a lower gross salary (or bonus) than they were before.

For further information, see our Practice Notes:

  1. Salary sacrifice—basic principles

  2. Types of salary sacrifice, and

  3. Implementing a salary sacrifice

Statutory provisions

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, SI 2017/172 impose an obligation on private and voluntary sector, with 250 or more employees on 5 April 2017 (and annually thereafter) to by no later than 4 April 2018 (and annually thereafter) publish:

  1. the difference between the mean (ie average) hourly rate of pay between male full-pay relevant employees and female full-pay relevant employees in the pay period within which 5 April 2017 falls

  2. the difference between the median (ie mid-point) hourly rate of pay between male full-pay relevant employees and female full-pay relevant employees in the pay period within which 5 April 2017 falls

  3. the difference

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