Salary Sacrifice is a voluntary agreement between you and an employee: they agree to exchange (sacrifice) part of their gross salary in return for a non-cash benefit — a pension contribution, a bike, an electric vehicle lease, and more.
Because the exchanged amount is deducted from gross pay rather than paid as cash, both the employee and your organisation pay less tax and National Insurance on it.
Since this changes an employee's contractual salary, each arrangement includes a formal agreement between the employee and the provider. Once it's active, Kota tracks it centrally alongside everything else the employee has sacrificed, so you always have one place to see the full picture.
🧩 Things to know
🧩 Things to know
At its core, Salary Sacrifice works the same way no matter which benefit an employee chooses: it's voluntary on both sides, so an employee opts in rather than having it assigned to them. The sacrificed amount comes out of gross pay before tax and National Insurance are calculated. Kota holds and manages the provider relationship for you, so you're not sourcing or negotiating anything yourself. And because less of the salary is paid as cash, both employer and employee end up paying less tax and National Insurance on it.
🛡 Why offer it through Kota
🛡 Why offer it through Kota
Most platforms either list providers and leave you to manage each relationship yourself, or broker one scheme without a real platform behind it. Kota gives you a management layer that sits between you, your employees, and every provider: a single place to see who's enrolled in what, check eligibility, and keep everything compliant — instead of managing payroll spreadsheets and provider CSVs by hand.
Kota also runs a compliance and eligibility engine behind every sacrifice. As employees combine multiple benefits, Kota checks that their combined sacrifices never take them below the National Minimum Wage (or National Living Wage). Pension sacrifice is included in that same calculation — so the protection covers everything an employee has sacrificed, not just the newest benefit they've added.
🎁 What's in it for your employees
🎁 What's in it for your employees
Employees get more than just access to a wider range of benefits — because the sacrificed amount is not taxed, the same benefit often costs them less than buying it outright after tax. They also don't have to source, compare, or negotiate anything themselves, or wait on HR to explain how something works: they explore and understand each benefit directly in Kota, choose what they want, and everything else — provider setup, payments, paperwork — is handled for them.
📦 Not a single benefit — a category of benefits
📦 Not a single benefit — a category of benefits
Salary Sacrifice isn't one benefit on Kota — it's a category containing several distinct schemes side by side, each shown to employees separately, but all counted together in one combined eligibility check. Pension, Cycle to Work, and Electric Vehicle leasing are available today, with more being added — see Salary Sacrifice Providers for what each one covers.
📊 Eligibility, limits, and reporting
📊 Eligibility, limits, and reporting
Kota works out how much of their salary each employee is eligible to sacrifice, based on their salary, the National Minimum Wage, and any additional rule you configure — and keeps this current automatically as circumstances change. You can also set your own cap, such as a minimum percentage of salary employees must retain (see Configure salary protection).
For every employee, you can see a full breakdown: gross salary, amount sacrificed, salary after sacrifice, remaining sacrifice capacity, and estimated tax and National Insurance savings for both sides. Reporting is one consolidated monthly report with a row for each employee's benefit arrangement — so an employee with two salary sacrifice benefits appears as two rows — rather than separate statements per provider.
⚠️ Things to keep in mind
⚠️ Things to keep in mind
Salary sacrifice reduces an employee's contractual gross pay, which is worth being aware of even though Kota builds in the necessary safeguards:
It can affect anything calculated from gross salary, such as mortgage applications or statutory payments like maternity or paternity pay — worth flagging to employees so they can make an informed choice.
Kota automatically protects every employee's National Minimum Wage (or National Living Wage), so a sacrifice can never legally reduce someone's pay below it. See Configure salary protection for how this works, and how to add a stricter rule of your own.
Employment contracts and payroll records should reflect any ongoing salary sacrifice arrangement — Kota handles the payroll deduction itself, but the contractual side remains yours to keep up to date
How it works, in short
How it works, in short
You'll find Salary Sacrifice as a benefit in your Kota dashboard. If you're interested, you can book a call with our team directly from there.
Our benefits team will get to know your needs and set up the right salary sacrifice benefits for your organisation.
From there, you can manage everything directly in Kota — see the benefits you have enabled, see which employees are enrolled, and keep track of it all in one place.
Employees discover and explore eligible benefits directly in Kota — no waiting on HR to explain anything — then sign in to the provider's own platform via single sign-on to browse, select, and sign the agreement.
Kota calculates each employee's available salary sacrifice budget, factoring in National Minimum Wage protection and any additional rule you configure (see Configure salary protection).
Deductions are applied through payroll, and Kota consolidates reporting across all your salary sacrifice providers in one place — reports will be available directly in Kota, instead of you reconciling separate provider statements by hand.
If you have any questions, reach out to us at [email protected] and we'll work through it with you.