How will a salary sacrifice affect married women paying reduced rate contributions?
If you sacrifice cash pay in return for a benefit that is exempt from National Insurance contributions, and this reduces the amount of your cash earnings to below the LEL (£87 a week in 2007/08), then you will not pay any contributions. If you are a married woman and your earnings are below the LEL for two consecutive tax years, and you are not self-employed in those years, you will automatically lose the right to pay reduced rate contributions. If you enter into a salary sacrifice and the reduced amount of cash earnings is between the LEL and the Primary Threshold (£100 a week for 2007/08) you will also not pay contributions but you will be treated as having paid contributions on those earnings. But as those contributions will be at the reduced rate they will not count for benefit or pension purposes. Where your earnings are between the LEL (£87 per week for 2007/08) and the Primary Threshold (£100 per week for 2007/08) it might be beneficial for you to change to paying full rate cont
