Salary exchange

What is salary exchange?

Salary exchange is an arrangement where employees exchange part of their salary in return for an employer pension contribution. Because the salary is being exchanged rather than paid directly, neither you nor your employees will pay National Insurance Contributions on the amount exchanged.

Salary exchange works hard for everyone

Our short film explains how salary exchange works and how it could potentially benefit you and your employees.

Salary exchange guide

Salary exchange guide

We can support salary exchange and tailor it to suit your needs in order to make your pension scheme as cost-effective and attractive as possible. Our employer guide explains everything you need to know about salary exchange and the key things to consider when implementing an agreement with your employees.

Read our guide (PDF, 598KB)



Work out how salary exchange could potentially benefit you and your employees. You can calculate an estimate of the potential savings based on the current National Insurance Contributions rates.

2024/2025 calculator (xls, 7MB)

Further support for you and your employees

To find out more about how we can help you with salary exchange, please speak to your scheme adviser, usual Scottish Widows contact, or if you don’t have one, please email us at

Or for more information on salary exchange, please explore our available resources aimed to help you support your employees.

Support for you

Employer guide (PDF, 598KB)
Salary exchange FAQs (PDF, 545KB)

Support for your employees

Employee factsheet (PDF, 992KB)

For employer use only.