Salary sacrifice scheme

[goody]

Anyone know if the information below is correct? I thought the cost of the bike was divided by the 18 month payment period which is the amount deducted from your gross monthly salary, 663.17 / 18 = 36.84

Thanks!


Hire Agreement Information

CALCULATIONS BASED ON:

VAT Products £663.17
Monthly Pay Cycle

Lower Tax Rate

Zero VAT Products £0.00

Salary Sacrifice (From Your Pay) £41.53

Actual Cost (From Your Pocket) £29.32

Total Cost Over (18 months) £527.76

 

[goody]

Is it because you have VAT added to each payment?

 

[jowwy]

are they using a third party to finance the bike? if so it could be the % added by the finance company

 

[Powely]

Isn't because you are sacrificing some of the gross pay to the scheme...i.e the difference between £663.17 to what you will see go out of your account....£527.76? I'm not sure but that how it's coming over to me. You will pay 29.32 each month for 18 months equalling £527.76 and the rest is from your top line pay. You should pay less tax too as your top line is lower. I could be way out though.

 

[stephen.rooke]

at the end youll need to pay a lump sum to keep the bike, 25% over £500 , 18% under 500(based on 12 months, reduces the longer the hire period) unless you take out another agreement for the balance. the payments save you ni and paye so reduces your net monthly payments

 

[Norm]

The question and most of the responses are scheme specific. Without seeing your scheme's details, it is difficult, if not impossible, to respond with any certainty.