1. What is Mortgage Salary Exchange?

The Royal London Mortgage Salary Exchange is an arrangement where employees give up part of their salary in exchange for mortgage contributions from their employer. This can result in tax and National Insurance savings.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Gross Pay — Total annual salary before deductions
• Income Tax — Amount deducted for income tax
• National Insurance — Amount deducted for NI contributions
• Mortgage Sacrifice — Amount sacrificed for mortgage payments

Explanation: The calculator shows your take-home pay after accounting for salary sacrifice arrangements.

3. Benefits of Salary Exchange

Details: Salary exchange can reduce your Income Tax and National Insurance contributions, potentially increasing your net pay while helping with mortgage payments.

4. Using the Calculator

Tips: Enter all amounts in GBP. The calculator requires positive values for gross pay, but other fields can be zero if applicable.

5. Frequently Asked Questions (FAQ)

Q1: How does salary exchange affect my pension?
A: Salary exchange may affect pensionable earnings. Consult with HR or a financial advisor about your specific situation.

Q2: Are there limits to how much I can sacrifice?
A: Yes, your reduced pay must not fall below the National Minimum Wage after sacrifice.

Q3: What's the difference between salary sacrifice and exchange?
A: Salary exchange is a type of salary sacrifice specifically for mortgage payments.

Q4: Can I opt out of salary exchange?
A: Yes, typically you can opt out during certain periods or if your circumstances change.

Q5: How often can I change my sacrifice amount?
A: This depends on your employer's policy, typically annually or with life events.