Salary Exchange

Salary Exchange was introduced for members of the Universities Superannuation Scheme (USS) and Oxford Staff Pension Scheme (OSPS) in June 2008. It affects the way in which pension contributions are made, with benefits both to the individual and to the University. Under the scheme, National Insurance contributions reduce, resulting in an increase in take-home pay for individuals and cost-savings for the University. These savings are returned to your department in the form of reduced costs.

As with the pensions schemes, Salary Exchange is an implied consent scheme. This means that all USS and OSPS members are enrolled automatically in Salary Exchange three months (for USS members) or immediately (for OSPS members) on commencement at the University unless they specifically choose to opt out.

Note: the Payroll Team can provide factual information about the scheme but not financial advice.

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By participating in Salary Exchange, you are agreeing to stay in the scheme until at least 31 March of the calendar year following that in which you join - i.e. if you join in July 2017 then you agree to participate until at least March 2018; if you join in February 2017 then you agree to participate until at least March 2018.

If you decide to opt-out of Salary Exchange, you will have the opportunity to elect to participate again with effect from 1 April of any subsequent year. Please use the opt-in form to let us know your intentions.

An exception to these rules will be made if you experience a qualifying 'life change event'. These include:

  • Commencing, or returning from, maternity leave, long-term parental leave, paternity leave or adoption leave;
  • Termination of your or your partner's employment;
  • Significant change of your or your partner's employment or hours of work;
  • Relocation - of either your home or your office;
  • Death of a close family member or dependant;
  • Marriage, divorce or legal separation;
  • Commencing, or returning from, long term sickness, or starting receipt of long-term disability benefit.

In these cases, and subject to the agreement of the University, you may opt in or out of Salary Exchange at a time other than the usual 1 April date. Should you wish to do so, please complete either an opt-in or opt-out form as appropriate and return it at once to the Payroll Team.

If you are a new starter then you do not need to complete the opt-in form in order to participate in Salary Exchange: you will be enrolled automatically on or around three months after your date of joining (for USS members) or from your start date (for OSPS members). If, as a new starter, you decide to opt-out, then you must complete and return your opt-out form no later than two months after the date you join the University (for USS members) or within the first month (for OSPS members) otherwise you will be enrolled automatically into Salary Exchange.

If you join or are currently a member of the Universities Superannuation Scheme (USS) or the Oxford Staff Pension Scheme (OSPS), you will be included in Salary Exchange automatically on or around three months (for USS members) or within one month (for OSPS members) after your date of joining and the following shall apply.

If you wish to opt out of Salary Exchange, you must complete and return an opt-out form no later than two months after the date of joining (for USS members) or within the first month (for OSPS members). The Salary Exchange Opt-Out Form (PDF) is available online or you can contact the Payroll Team on: 01865 (6)16301.

The terms and conditions of employment for all eligible employees have been notified on their original employment contracts.

Please note that, if you do not opt out within two months of joining, you will be unable to do so until 1 April in the calendar year following that in which you join, unless you experience a life change event (as described in question 20 of the Salary Exchange Q&A page.

The statement of terms and conditions in your contract of employment with the University of Oxford sets out the salary scale for your grade and your Basic Salary or refers to a fixed salary which is personal to you. The changes under Salary Exchange mean that your Basic Salary will be reduced by the current contribution rate for employees. The University will increase its employer pension contribution into USS by the equivalent amount.

Reviews of your Basic Salary against the salary spine or fixed rate will continue to be undertaken. Should your rate of pay change as a consequence of such a review, you will be advised of your revised rate of Pre-Salary Exchange Basic Salary.

Your Pensionable Salary is the sum of your Pre-Salary Exchange Basic Salary and any other pensionable pay elements using the pre-Salary Exchange values in every case. Your Pensionable Salary and all entitlements to benefits under USS are unaffected by participation in Salary Exchange.      

Under Salary Exchange, any other pensionable pay elements you receive will also be reduced by the current contribution rate for employees. An equivalent amount will be paid by the University as an employer pension contribution into USS or OSPS.

Your Adjusted Salary is the sum of your Post-Salary Exchange Basic Salary and other pensionable pay elements, reduced by the current contribution rate for employees, plus any non-pensionable payments you may receive (the latter are unaffected by Salary Exchange). PAYE and NIC calculations will be made on your Adjusted Salary. These statutory deductions, together with some other statutory and voluntary deductions (e.g. season ticket loan repayments) are deducted from your Adjusted Salary to produce your net take-home pay.

If you are entitled to additional pay for overtime working, shift allowances, on-call, and similar pay supplements, these will continue to be calculated by reference to the relevant Pre-Salary Exchange Basic Salary values.

Any holiday pay which you are entitled to receive in cash on leaving the University's employment will be based on your Pre-Salary Exchange Basic Salary.

In accordance with statutory requirements, Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP) and Statutory Paternity Pay (SPP) will be based on your Adjusted Salary. Your SMP will be calculated using your Adjusted Salary, in line with statutory requirements.

University maternity, paternity and sick pay will continue to be based on your Pre-Salary Exchange Basic Salary. Provided you continue to participate in Salary Exchange, you will sacrifice an amount equivalent to 6.35% of your Pensionable Salary, provided that this does not reduce your Adjusted Salary below the statutory amount (i.e. the SSP, SMP, or SPP level calculated above).

The University will ensure that no one in receipt of Statutory Sick Pay, Statutory Maternity Pay or Statutory Paternity Pay will be adversely affected by participating in Salary Exchange.

The University of Oxford reserves the right to amend or discontinue Salary Exchange should the University determine that it is appropriate for it to do so, taking into account such relevant matters from time to time including changes to UK tax and National Insurance Contributions legislation.

The date on which you join the University; if you are already working for the University, the date on which you join the USS or OSPS pension scheme.

Contact us


  : Payroll Services
       Finance Division
       University of Oxford
       23-38 Hythe Bridge Street
       Oxford, OX1 2ET

  :  payroll@admin.ox.ac.uk
  :  01865 (6) 16301

 
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