Payment is deducted from your salary. Your payslip will detail the deductions made each month.
Salary sacrifice
Payments for the Cyclescheme are made by salary sacrifice to achieve tax and national insurance savings. Payment for buying annual leave is also by salary sacrifice.
A salary sacrifice is based on the employee giving up the right to receive part of their normal contractual pay in return for a benefit. The sacrifice reduces an employee’s gross pay which will have implications on future state benefits. For example, the state pension, statutory sick pay and statutory elements of maternity pay are calculated on the reduced salary. Employees may wish to consider this when deciding whether to take advantage of salary sacrifice.
A salary sacrifice will also reduce the weekly pay which may be used to calculate a redundancy payment and pay instead of a notice. HR are able to provide more information on salary sacrifice if required.