Salary Sacrifice for Work-Related Training - University of Ulster

Salary Sacrifice for Work-Related Training
All staff should be aware that there is a specific tax exemption for work-related training. This exemption
makes the provision of work-related training suitable for a salary sacrifice scheme/arrangement. The
exemption also applies to NlCs.
What is work-related training?
The term "work-related training" means a training course or other activity designed to impart, instil, improve
or reinforce any knowledge, skills or personal qualities that are likely to prove useful to the employee when
performing the duties of the employment, or will qualify or better qualify the employee to perform those
duties.
Scope of the exemption
Where training is provided for an employee, any benefit incidental to such training, or the payment or
reimbursement of:-
the cost of such training or benefit,
costs that are incidental to the employee undertaking the training, and in line with normal
University expenses guidelines
expenses incurred in connection with an examination or other assessment of what the
employee has gained from the training, and
the cost of obtaining any qualification, registration or "award" to which the employee is
entitled as a result of such training, examination or assessment.
How do you apply?
If you feel that you have paid for a course that falls within the work related training category, please
submit the following to your line manager for approval:-
1. Completed work related training claim pro-forma (See Work Related Training Pro-forma)
2. Documentation outlining details of training provider, training & content
3. Evidence of personal payment for work related training e.g. receipt as proof of payment
How does Salary Sacrifice for Work Related Training work?
If approved by line management the approved pro-forma, training related documentation & evidence of
personal payment is sent to Salaries and Wages for processing. The cost of the course will be sacrificed
from your Gross pay in line with the repayment schedule below:-
Training Cost (£)
(incl VAT)
Salary Sacrifice Period
£0 – £500 < 1 month*
£501 – £1,000 < 2 months*
> £1,000 < 3 months*
* provided there is sufficient gross pay to allow the salary sacrifice. For larger training costs to be salary sacrificed
consideration will be given to expending the salary sacrifice period over > 3 months
The same figure will be then reimbursed as a net pay addition to ensure the appropriate overall pay is
received (enabling the member of staff to get tax/NI relief on the training amount sacrificed). Examples of
potential Tax and NI savings are detailed below.
Implementation
Start date 1 st November 2010.
All work-related training undertaken in the 2010/11 tax year is eligible for Salary Sacrifice i.e. training
between 01/04/2010 and 31/03/2011 can be processed via payroll for salary sacrifice provided all
the qualification criteria are met and the appropriate authorization is given. All approved
documentation must be received before payroll cut-off in March 2011 to enable processing within the
current tax year.

Deduction over 1 month
WORK RELATED TRAINING SAVINGS
EMPLOYEE FINANCIALS Basic Taxpayer
Higher taxpayer
20% tax and 9.4% NI 40% tax and 1% NI
Cost of training incl. VAT 495.00 495.00
Duration of deductions 1 month 1 month
Monthly deduction 495.00 495.00
Less tax saving -99.00 -198.00
Less NI saving -46.53 -4.95
Total cost after tax & NI
savings
349.47 292.05
Deduction over 2 months
EMPLOYEE FINANCIALS Basic Taxpayer
20% tax and 9.4% NI 40% tax and 1% NI
Cost of training incl. VAT 995.00 995.00
Duration of deductions 2 months 2 months
Monthly deduction 497.50 497.50
Less tax saving -99.50 -199.00
Less NI saving -46.77 -4.98
Monthly net reduction 351.23 293.52
Total cost after tax & NI
savings
702.46 587.04
Deduction over 3 months
EMPLOYEE FINANCIALS Basic Taxpayer
Higher taxpayer
Higher taxpayer
20% tax and 9.4% NI 40% tax and 1% NI
Cost of training incl. VAT 1495.00 1495.00
Duration of deductions 3 months 3 months
Monthly deduction 498.33 498.33
Less tax saving -99.67 -199.33
Less NI saving -46.84 -4.98
Monthly net reduction 351.82 294.02
Total cost after tax & NI
savings
1055.46 882.06