Nottingham City Council makes savings with holiday purchase via salary sacrifice

Nottingham City Council is expected to save more than £154,000 in its first year of offering a scheme to allow employees to purchase additional holiday via a salary sacrifice arrangement.

The scheme, which was introduced in January, and is due to be launched again in September, is provided by P&MM. It allows 7,000 eligible employees to sacrifice part of their monthly salary to purchase between eight and 10 additional days, depending on their annual leave entitlement.

Before purchasing extra days, employees are eligible for either 30 or 32 days annually, depending on length of service. Using the perk, they cannot take more than 40 days of leave a year.

Higher-rate taxpayers can save as much as 41% on tax and national insurance (NI). The employer also makes savings on the NI contributions, which, in turn, reduces the overall annual salary bill.

Angela Probert, director of HR and transformation at Nottingham City Council, said: “With the UK public sector facing substantial cuts, we need to try to reduce costs where possible, creating as little detrimental impact on our employees and customers as possible.”

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