A conversation with Becky Dillon, Head of Payroll at Thomas & Co.

Salary sacrifice has the potential to save both an employer, and its employees a lot of money. Yet despite these advantages, it remains something a number of small businesses never explore.

To understand why, we spoke with Becky Dillon, Head of Payroll at Thomas & Co, who works closely with entrepreneurs and fast-growing companies across the UK. What she shared reveals a simple truth: salary sacrifice isn’t being avoided because it’s complicated - it’s being overlooked because it’s invisible.

SMEs aren’t using salary sacrifice

Becky summed up the situation clearly: hardly any of the businesses she works with use salary sacrifice at all. Even when it could make a noticeable difference, it rarely comes up in conversations with employers or employees.

Larger employers tend to explore it eventually, especially once they reach a few hundred staff. But smaller companies often stick with the pension setup they first created and don’t revisit it. Salary sacrifice simply never enters the discussion.

The missing piece: simple, practical education

A recurring theme in our conversation was that salary sacrifice doesn’t fail because employers don’t want to reduce costs. It fails because no one seems to be explaining it in a way that feels clear and easy.

Accountants and payroll teams are focused on getting the basics right — onboarding, contributions, compliance. With limited time and no easy way to illustrate the impact, salary sacrifice ends up as something that “sounds interesting” but doesn’t get actioned, even in scenarios where it could save companies thousands of pounds.

At Compound we have spent years understanding pensions, both from the individuals perspective, and the employers, and we have come to the conclusion that pensions across the UK suffer from a lack of engagement and clarity. Salary sacrifice is simply an extension of this problem.

According to Becky, what could make the difference is pretty straightforward: a simple way to show employers what salary sacrifice would mean for their business. Not a long document. Not a technical guide. Just a clean, visual comparison that says: here’s the difference with it, here’s the difference without it. That clarity is missing in most conversations today.

Why this matters

Salary sacrifice won’t be suitable for everyone, and every employer needs to consider their own circumstances. But what stands out from Becky’s experience is that many SMEs aren’t making an active decision at all, they’re unaware that salary sacrifice exists as an option.

This leaves both employers and employees missing out on something that could reduce costs at a time when budgets are tight for everyone.

If you’d like to explore what the numbers could look like for your business, you can reach me directly at [email protected], or use our straightforward Salary Sacrifice Calculator here.